Legume root nodule nitrogen-fixing activity is severely affected by osmotic stress. Proline accumulation has been shown to induce tolerance to salt stress, and transgenic plants over-expressing Delta(1)-pyrroline-5-carboxylate synthetase (P5CS), which accumulates high levels of proline, display enhanced osmotolerance. Here, we transformed the model legume Medicago truncatula with the P5CS gene from Vigna aconitifolia, and nodule activity was evaluated under osmotic stress in transgenic plants that showed high proline accumulation levels. Nitrogen fixation was significantly less affected by salt treatment compared to wild-type (WT) plants. To our knowledge, this is the first time that transgenic legumes have been produced that display nitrogen-fixing activity with enhanced tolerance to osmotic stress. We studied the expression of M. truncatula proline-related endogenous genes M. truncatulaDelta(1)-pyrroline-5-carboxylate synthetase 1 (MtP5CS1), M. truncatulaDelta(1)-pyrroline-5-carboxylate synthetase 2 (MtP5CS2), M. truncatula ornithine delta-aminotransferase (MtOAT), M. truncatula proline dehydrogenase (MtProDH) and a proline transporter gene in both WT and transgenic plants. Our results indicate that proline metabolism is finely regulated in response to osmotic stress in an organ-specific manner. The transgenic model allowed us to analyse some of the biochemical and molecular mechanisms that are activated in the nodule in response to high salt conditions, and to ascertain the essential role of proline in the maintenance of nitrogen-fixing activity under osmotic stress.