We describe a signaling pathway that mediates salt stress responses in Arabidopsis. The response is mechanistically related to endoplasmic reticulum (ER) stress responses described in mammalian systems. Such responses involve processing and relocation to the nucleus of ER membrane-associated transcription factors to activate stress response genes. The salt stress response in Arabidopsis requires a subtilisin-like serine protease (AtS1P), related to mammalian S1P and a membrane-localized b-ZIP transcription factor, AtbZIP17, a predicted type-II membrane protein with a canonical S1P cleavage site on its lumen-facing side and a b-ZIP domain on its cytoplasmic side. In response to salt stress, it was found that myc-tagged AtbZIP17 was cleaved in an AtS1P-dependent process. To show that AtS1P directly targets AtbZIP17, cleavage was also demonstrated in an in vitro pull-down assay with agarose bead-immobilized AtS1P. Under salt stress conditions, the N-terminal fragment of AtbZIP17 tagged with GFP was translocated to the nucleus. The N-terminal fragment bearing the bZIP DNA binding domain was also found to possess transcriptional activity that functions in yeast. In Arabidopsis, AtbZIP17 activation directly or indirectly upregulated the expression of several salt stress response genes, including the homeodomain transcription factor ATHB-7. Upregulation of these genes by salt stress was blocked by T-DNA insertion mutations in AtS1P and AtbZIP17. Thus, salt stress induces a signaling cascade involving the processing of AtbZIP17, its translocation to the nucleus and the upregulation of salt stress genes.