Plants accumulate a variety of osmoprotectants that improve their ability to combat abiotic stresses. Among them, betaine appears to play an important role in conferring resistance to stresses. Betaine is synthesized via either choline oxidation or glycine methylation. An increased betaine level in transgenic plants is one of the potential strategies to generate stress-tolerant crop plants. Here, we showed that an exogenous supply of serine or glycine to a halotolerant cyanobacterium Aphanothece halophytica, which synthesizes betaine from glycine by a three-step methylation, elevated intracellular accumulation of betaine under salt stress. The gene encoding 3-phosphoglycerate dehydrogenase (PGDH), which catalyzes the first step of the phosphorylated pathway of serine biosynthesis, was isolated from A. halophytica. Expression of the Aphanothece PGDH gene in Escherichia coli caused an increase in levels of betaine as well as glycine and serine. Expression of the Aphanothece PGDH gene in Arabidopsis plants, in which the betaine synthetic pathway was introduced via glycine methylation, further increased betaine levels and improved the stress tolerance. These results demonstrate that PGDH enhances the levels of betaine by providing the precursor serine for both choline oxidation and glycine methylation pathways.