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Mechanisms of drought tolerance have been studied by numerous groups, and a broad range of molecules have been identified to play important roles. A noteworthy response of stressed plants is the accumulation of novel protective proteins, including heat-shock proteins (HSPs) and late embryogenesis abundant (LEA) proteins. Identification of gene regulatory networks of these protective proteins in plants will allow a wide application of biotechnology for enhancement of drought tolerance and adaptation. Similarly, aquaporins are involved in the regulation of water transport, particularly under abiotic stresses. The molecular and functional characterization of protective proteins and aquaporins has revealed the significance of their regulation in response to abiotic stresses. Herein, we highlight new findings regarding the action mechanisms of these proteins. Finally, this review also surveys the current advances in engineering drought tolerant plants, particularly the engineering of protective proteins (sHSPs and LEA) and aquaporins for imparting drought stress tolerance in plants.