The ubiquitin conjugating enzyme E2 (UBC E2) mediates selective ubiquitination, acting with E1 and E3 enzymes to designate specific proteins for subsequent degradation. In the present study, we characterized the function of the mung bean VrUBC1 gene (Vigna radiata UBC 1). RNA gel-blot analysis showed that VrUBC1 mRNA expression was induced by either dehydration, high salinity or by the exogenous abscisic acid (ABA), but not by low temperature or wounding. Biochemical studies of VrUBC1 recombinant protein and complementation of yeast ubc4/5 by VrUBC1 revealed that VrUBC1 encodes a functional UBC E2. To understand the function of this gene in development and plant responses to osmotic stresses, we overexpressed VrUBC1 in Arabidopsis (Arabidopsis thaliana). The VrUBC1-overexpressing plants displayed highly sensitive responses to ABA and osmotic stress during germination, enhanced ABA- or salt-induced stomatal closing, and increased drought stress tolerance. The expression levels of a number of key ABA signaling genes were increased in VrUBC1-overexpressing plants compared to the wild-type plants. Yeast two-hybrid and bimolecular fluorescence complementation demonstrated that VrUBC1 interacts with AtVBP1 (A. thaliana VrUBC1 Binding Partner 1), a C3HC4-type RING E3 ligase. Overall, these results demonstrate that VrUBC1 plays a positive role in osmotic stress tolerance through transcriptional regulation of ABA-related genes and possibly through interaction with a novel RING E3 ligase.