Transgenic plants have been produced which have been engineered to produce physiologically significant levels of sugar alcohols, or polyols, which is not natively produced by plants of the species. Transgenic plants have been engineered to express a bacterial mannitol-1-P dehydrogenase which, in the reverse reaction in the plant cells, produces mannitol from fructose in a plant which does not natively produce mannitol. Levels of polyols in plant cells have been associated with osmotic regulation and thereby with water stress tolerance. The transgenic plants have significant research value, and, surprisingly, seem to exhibit enhanced growth rates and vigor, and stress tolerance. Another polyol-producing enzyme gene has been isolated from a stress tolerant plant.