Potato (Solanum tuberosum L.) is generally considered to be sensitive to drought stress. Even short periods of water shortage can result in reduced tuber production and quality. We previously reported that transgenic potato plants expressing the sweet potato orange gene (IbOr) under the control of the stress-inducible SWPA2 promoter (referred to as SOR plants) showed increased tolerance to methyl viologen-mediated oxidative stress and high salinity, along with increased carotenoid contents. In this study, in an effort to improve the productivity and environmental stress tolerance of potato, we subjected transgenic potato plants expressing IbOr to water-deficient conditions in the greenhouse. The SOR plants exhibited increased tolerance to drought stress under greenhouse conditions. IbOr expression was associated with slightly negative phenotypes, including reduced tuber production. Controlling IbOr expression imparted the same degree of drought tolerance while ameliorating these negative phenotypic effects, leading to levels of tuber production similar to or better than those of wild-type plants under drought stress conditions. In particular, under drought stress, drought tolerance and the production of marketable tubers (over 80g) were improved in transgenic plants compared with non-transgenic plants. These results suggest that expressing the IbOr transgene can lead to significant gains in drought tolerance and tuber production in potato, thereby improving these agronomically important traits.