Two cDNAs encoding putative type 1 acyl-CoA: diacylglycerol acyltransferases (DGAT1, EC 2.3.1.20), were cloned from Tetraena mongolica, an extreme xerophyte with high oil content in the stems. The 1 488-bp and 1 485-bp of the open reading frame (ORF) of the two cDNAs, designated as TmDGAT1a and TmDGAT1b, were both predicted to encode proteins of 495 and 494 amino acids, respectively. Southern blot analysis revealed that TmDGAT1a and TmDGAT1b both had low copy numbers in the T. mongolica genome. In addition to ubiquitous expression with different intensity in different tissues, including stems, leaves and roots, TmDGAT1a and TmDGAT1b, were found to be strongly induced by high salinity, drought and osmotic stress, resulting in a remarkable increase of triacylglycerol (TAG) accumulation in T. mongolica plantlets. TmDGAT1a and TmDGAT1b activities were confirmed in the yeast H1246 quadruple mutant (DGA1, LRO1, ARE1, ARE2) by restoring DGAT activity of the mutant host to produce TAG. Overexpression of TmDGAT1a and TmDGAT1b in soybean hairy roots as well as in T. mongolica calli both resulted in an increase in oil content (ranging from 37% to 108%), accompanied by altered fatty acid profiles.