To understand low temperature and osmotic stress signaling in plants, we isolated and characterized two allelic Arabidopsis mutants, los5-1 and los5-2, which are impaired in gene induction by cold and osmotic stresses. Expression of RD29A-LUC (the firefly luciferase reporter gene under the control of the stress-responsive RD29A promoter) in response to cold and salt/drought is reduced in the los5 mutants, but the response to abscisic acid (ABA) remains unaltered. RNA gel blot analysis indicates that the los5 mutation reduces the induction of several stress-responsive genes by cold and severely diminishes or even completely blocks the induction of RD29A, COR15, COR47, RD22, and P5CS by osmotic stresses. los5 mutant plants are compromised in their tolerance to freezing, salt, or drought stress. los5 plants are ABA deficient, as indicated by increased transpirational water loss and reduced accumulation of ABA under drought stress in the mutant. A comparison with another ABA-deficient mutant, aba1, reveals that the impaired low-temperature gene regulation is specific to the los5 mutation. Genetic tests suggest that los5 is allelic to aba3. Map-based cloning reveals that LOS5/ABA3 encodes a molybdenum cofactor (MoCo) sulfurase. MoCo sulfurase catalyzes the generation of the sulfurylated form of MoCo, a cofactor required by aldehyde oxidase that functions in the last step of ABA biosynthesis in plants. The LOS5/ABA3 gene is expressed ubiquitously in different plant parts, and the expression level increases in response to drought, salt, or ABA treatment. Our results show that LOS5/ABA3 is a key regulator of ABA biosynthesis, stress-responsive gene expression, and stress tolerance.