Transcription factors (TF) play a crucial role in regulating gene expression and are fit to regulate diverse cellular processes by interacting with other proteins. A TF named calmodulin binding transcription activator (CAMTA) was identified in Arabidopsis thaliana (AtCAMTA1-6). To explore the role of CAMTA1 in drought response, the phenotypic differences and gene expression was studied between camta1 and Col-0 under drought condition. In camta1, root development was abolished showing high-susceptibility to induced osmotic stress resulting in small wrinkled rosette leaves and stunted primary root. In camta1 under drought condition, we identified growth retardation, poor WUE, low photosystem II efficiency, decline in RWC and higher sensitivity to drought with reduced survivability. The microarray analysis of drought treated camta1 revealed that CAMTA1 regulates “drought recovery” as most indicative pathway along with other stress response, osmotic balance, apoptosis, DNA methylation and photosynthesis. Interestingly, majority of positively regulated genes were related to plasma membrane and chloroplast. Further, our analysis indicates that CAMTA1 regulates several stress responsive genes including RD26, ERD7, RAB18, LTPs, COR78, CBF1, HSPs etc. and promoter of these genes were enriched with CAMTA recognition cis-element. CAMTA1 probably regulate drought recovery by regulating expression of AP2-EREBP transcription factors and Abscisic acid response. CAMTA1 rapidly changes broad spectrum of responsive genes of membrane integrity and photosynthetic machinery by generating ABA response for challenging drought stress. Our results demonstrate the important role of CAMTA1 in regulating drought response in Arabidopsis, thus could be genetically engineered for improving drought tolerance in crop.