More than a decade has passed since the first commercially successful genetically engineered agricultural crops were launched. These first products were based, in large part, on simple monogenic traits, such as herbicide tolerance or insect resistance that did not require manipulation of complex molecular pathways. Engineering crops with improved abiotic stress tolerance has proven to be much more difficult due to the multiple pathways involved in controlling native stress responses and the complex ways in which plants respond to environmental conditions under field conditions. One of the biggest challenges for abiotic stress research is to bridge the gap between basic research in model organisms and applied research in crops, under relevant field conditions. In cotton and peanut, as in all genetically altered crop plants, it is ultimately the yield under specific field conditions that determines whether or not a specific gene or signaling pathway is of technological importance. While model systems are critical in elucidating the molecular mechanism by which plants sense and respond to environmental stress, it is essential to evaluate the agronomic value of these discoveries directly in crop plants under Òreal-worldÓ production scenarios. To this end, we have initiated a series of experiments to evaluate crop response to water-deficit and thermal stress, identify novel germplasm with contrasting stress response phenotypes, and employ genomics technology to elucidate underlying molecular mechanisms controlling the stress response. Additionally, we have developed independent transgenic cotton and peanut lines that express the stress-associated regulatory proteins, both single genes and transcription factors, under control of constitutive or stress responsive promoters and will report on our findings regarding performance under field conditions.