NAC proteins constitute a family of plant-specific transcription factors that are involved in many plant cellular processes including responses to abiotic stress. In this study, a cDNA clone encoding the HvSNAC1 transcription factor was isolated from drought stressed barley using a bioinformatics approach based on amino acid sequence data of the stress-related SNAC1 protein from rice. Phylogenetic analysis of the deduced amino acid sequence of HvSNAC1 showed that this protein belongs to the stress clade of NAC proteins that include SNAC1 and TaNAC2. Expression analysis indicated that the HvSNAC1 gene is strongly induced by different abiotic stresses including drought. Overexpression of HvSNAC1 in barley under the control of a constitutive promoter produced plants that grew normally under well watered conditions when compared with wild type plants. Transgenic barley plants overexpressing HvSNAC1 showed higher drought tolerance at different growth stages when compared with wild type plants. In addition, the constitutive overexpression of HvSNAC1 resulted in improved water status, photosynthetic activity and reduced water loss rate when compared with wild type plants under drought conditions. Furthermore, the transgenic plants also showed significantly improved productivity as reflected by the increase in biological yield over the wild type plants under severe field drought conditions. In conclusion, the HvSNAC1 gene could be a useful tool to improve barley productivity under field drought conditions without impairment in growth under normal field conditions.