Salinity is a major abiotic constraint affecting oat productivity. Several physiological and biochemical traits have been found to be related to yield maintenance under salinity. The impact of introducing the Arabidopsis CBF3 gene controlled by the rd29A stress-inducible promoter in T(2) transgenic oat on salinity tolerance and associated physiological changes were studied. Compared with the non-transgenic control, transgenic T(2) plants exhibited greater growth and showed significant maintenance of leaf area, relative water content, chlorophyll content, photosynthetic and transpiration rates as well as increased levels of proline and soluble sugars under high salt stress. These physiological changes delayed leaf-wilting symptoms, increased tolerance and reduced yield loss. At a salinity stress level of 100mM, the CBF3-overexpressing transgenic oat showed a yield loss of 4-11% compared with >56% for the non-transgenic control. These results demonstrate that stress-inducible over-expression of CBF3 may have the potential to enhance abiotic stress tolerance in oat.