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The AP2/EREBP family transcription factors play important roles in a wide range of stress tolerance and hormone signaling. In this study, a heat-inducible rice <i>ERF</i> gene was isolated and functionally characterized. The <i>OsERF115/AP2EREBP110</i> was categorized to Group-IIIc of the rice AP2/EREBP family and strongly induced by heat and drought treatment. The OsERF115/AP2EREBP110 protein targeted to nuclei and suppressed the ABA-induced transcriptional activation of <i>Rab16A</i> promoter in rice protoplasts. Overexpression of <i>OsERF115/AP2EREBP110</i> enhanced thermotolerance of seeds and vegetative growth stage plants. The <i>OsERF115/AP2EREBP110</i> overexpressing (OE) plants exhibited higher proline level and increased expression of a proline biosynthesis <i>P5CS1</i> gene. Phenotyping of water use dynamics of the individual plant indicates that the <i>OsERF115/AP2EREBP110</i>-OE plant exhibited better water saving traits under heat and drought combined stress. Our combined results suggest the potential use of <i>OsERF115/AP2EREBP110</i> as a candidate gene for genetic engineering approaches to develop heat and drought stress-tolerant crops.