Several E3 ubiquitin ligases have been associated with the response to abiotic and biotic stresses in higher plants. Here, we report that the hot pepper (Capsicumannuum) abscisic acid (ABA)-InsensitiveRINGprotein1gene(CaAIR1) is essential for a hypersensitive response to drought stress. CaAIR1 contains a C3HC4-type RING finger motif, which plays a role for attachment of ubiquitins to the target protein, and a putative transmembrane domain. The expression levels of CaAIR1 are upregulated in pepper leaves by ABA treatments, drought, and NaCl, suggesting its role in the response to abiotic stress. Our analysis showed that CaAIR1 displays self-ubiquitination and localized in the nucleus. We generated CaAIR1-silenced peppers via virus-induced gene silencing (VIGS) and CaAIR1-overexpressing (OX) transgenic Arabidopsis plants to evaluate their responses to ABA and drought. VIGS of CaAIR1 in pepper plants conferred an enhanced tolerance to drought stress, which was accompanied by low levels of transpirational water loss in the drought-treated leaves. CaAIR1-OX plants displayed an impaired sensitivity to ABA during seed germination, seedling, and adult stages. Moreover, these plants showed enhanced sensitivity to drought stress because of reduced stomatal closure and decreased expression of stress-responsive genes. Thus, our data indicate that CaAIR1 is a negative regulator of the ABA-mediated drought-stress tolerance mechanism.