In legumes, drought causes early senescence due to loss of the symbiotic relationship between the plant and the rhizobacterium. Senescence is characterized by increases in proteolytic enzymes required for protein recycling to other plant tissues. Transgenic soybean plants over-expressing a cysteine protease inhibitor (OC-I) were successfully generated and characterized. Plants of transgenic lines had differential transgene expression. Transgenic plants had lower protease activity determined by both an in-gel assay and in a fluoremetric assay using SDS-PAGE and fluorogenic protease substrate, respectively. Transgenic Arabidopsis plants over-expressing OC-I, generated by floral dip method, were more drought-tolerant compared to non-transgenic Arabidopsis plants. Seeds of different transgenic soybean lines had a lower germination rate and these transgenic lines had fewer leaves and shorter stems. Under drought stress, plants of transgenic lines performed better than wild-type non-transgenic plants with CO2 assimilation (photosynthesis) and better instantaneous water-use efficiencies (IWUE). In particular, plants of one transgenic line (line 57) appeared to be more drought-tolerant when compared to plants of all other tested lines. These transgenic plants retained more soil water and also had fewer leaves when compared to wild-type non-transgenic plants. Results obtained in this study have provided evidence that preventing cysteine protease activity by over-expressing a protease inhibitor causes phenotypic changes of the plant demonstrating an important role of cysteine proteases in plant growth and development and plant stress. Future work will focus on identifying these OC-I sensitive proteases and investigating their individual function in plant growth and development and stress.