Crop damage due to environmental stresses, including drought, high salinity, and high temperature, occurs worldwide. Therefore, genetically modifying plants to increase their environmental stress tolerance is an important global issue. In this paper, we discuss recent developments in basic and applied research aimed at genetically improving crop environmental stress tolerance. First, we review the progress made in understanding the environmental stress-tolerance mechanisms in plants, using Arabidopsis or rice as models. Then, we discuss our international collaboration to genetically modify crops such as rice, wheat, sugarcane and soybean that entails greenhouse- or field-based drought-tolerance tests. Finally, we assess the future prospects for developing stress-tolerant varieties.