Arabidopsis thaliana cyclic nucleotide-gated ion channel gene 4 (AtCNGC4) loss-of-function mutant dnd2 exhibits elevated accumulation of salicylic acid (SA), dwarfed morphology, reduced hypersensitive response (HR), altered disease resistance and spontaneous lesions on plant leaves. An orthologous barley mutant, nec1, has been reported to over-accumulate indole-3-acetic acid (IAA) and to exhibit changes in stomatal regulation in response to exogenous auxin. Here we show that the Arabidopsis dnd2 over-accumulates both IAA and abscisic acid (ABA) and displays related phenotypic and physiological changes, such as, reduced stomatal size, higher stomatal density and stomatal index. dnd2 showed increased salt tolerance in root growth assay and significantly reduced stomatal conductance, while maintaining near wt reaction in stomatal conductance upon external application of ABA, and probably consequently increased drought stress tolerance. Introduction of both sid2-1 and fmo1 into dnd2 background resulting in removal of SA did not alter stomatal conductance. Hence, the closed stomata of dnd2 is probably a result of increased ABA levels and not increased SA levels. The triple dnd2sid2abi1-1 mutant exhibited intermediate stomatal conductance compared to dnd2 and abil-1 (ABA insensitive, open stomata), while the response to external ABA was as in abi1-1 suggesting that reduced stomatal conductance in dnd2 is not due to impaired ABA signaling. In conclusion, Arabidopsis dnd2 mutant exhibited ABA overaccumulation and stomatal phenotypes, which may contribute to the observed improvement in drought stress resistance. Thus, Arabidopsis dnd2 mutant may serve as a model for studying crosstalk between biotic and abiotic stress and hormonal response in plants.