Molecular analyses of plants have revealed a number of genes whose expression changes in response to high light (HL), including the H2O2 scavenger, ASCORBATE PEROXIDASE 2 (APX2). We carried out a screen in Arabidopsis thaliana for lesions that alter HL-induced expression of APX2 to identify components in abiotic stress signalling pathways. High light was used as it can be instantaneously applied or removed and accurately measured. We identified a number of alx mutations causing altered APX2 expression. Here we describe the gain-of-function mutant, alx8, which has constitutively higher APX2 expression and higher levels of foliar abscisic acid (ABA) than wild type. In fact, exogenous ABA increased APX2 expression and the APX2 promoter contains ABA response elements. Furthermore, we have shown that HL stress increases ABA in wild-type plants, implicating ABA in the regulation of HL-inducible genes. The alx8 mutant is drought tolerant, exhibits improved water-use efficiency and a number of drought-tolerance genes are upregulated. Additionally, alx8 demonstrates the complexity of ABA-dependent and ABA-independent transcriptional networks as some components in both pathways are upregulated in alx8. This study provides evidence for common steps in drought and HL stress response pathways.