We report here the development of transgenic tobacco plants with thaumatin gene of Thaumatococcus daniellii under the control of a strong constitutive promoter-CaMV 35S. Both polymerase chain reaction and genomic Southern analysis confirmed the integration of transgene. Transgenic plants exhibited enhanced resistance with delayed disease symptoms against fungal diseases caused by Pythium aphanidermatum and Rhizoctonia solani. The leaf extract from transgenic plants effectively inhibited the mycelial growth of these pathogenic fungi in vitro. The transgenic seeds exhibited higher germination percentage and seedling survival under salinity and PEG-mediated drought stress as compared to the untransformed controls. These observations suggest that thaumatin gene can confer tolerance to both fungal pathogens and abiotic stresses.