Two nucleotide sequences encoding two different polypeptides found in yeast trehalose synthase have been isolated and cloned. The coding sequences can be inserted into suitable vectors and used to transform host cells. The transformed cells will produce increased amounts of trehalose compared to the untransformed wild types and have increased tolerance to a variety of stresses, in particular to decreased availability of water. The invention may be used to improve the stress tolerance of organisms, to increase the storage life of foodstuffs and to produce trehalose economically on an industrial scale in an organism (e.g, baker's yeast) that is a traditional and safe foodstuff.