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WRKY transcription factors play crucial roles in plant response to environmental stresses. This study aimed to investigate an uncharacterized gene (At2g30590) encoding AtWRKY21 in mediating an adaptive response to osmotic stress in Arabidopsis. AtWRKY21expressed at various development stages and was substantially induced by drought stress but not salinity. Confocal scanning detection shows that AtWRKY21 resides in the nucleus. Two AtWRKY21 knockout mutant lines displayed drought tolerance phenotype by increasing plant biomass, chlorophyll accumulation, survival rate, and leafy water retention, whereas transgenic lines overexpressing AtWRKY21 show drought supersensitive phenotype. The wrky21 mutant lines had a lower degree of drought-induced cellular damage, with reduced electrolyte leakage and peroxides. In contrast, the AtWRKY21 OE lines exhibited adverse tolerant responses. We performed a genome-wide RNA sequencing of wrky21 and its wild-type rice exposed to osmotic stress to identify differentially expressed genes relevant to AtWRKY21-mediated drought stress response. We profiled 291 upregulated and 607 downregulated genes. Gene Ontology analysis showed pathways closely related to the drought stress response and expression of numerous genes such as protein binding transcription factors and drought-stress tolerance was changed. A set of genes were possibly working on the downstream of AtWRKY21. The results suggest that AtWRKY21 functions as a negative regulator of plant response to drought stress.