The homeodomain leucine zipper (HDZip) proteins constitute a plant-specific family of transcription factors, that based on sequence criteria have been grouped into four classes, HDZip I-IV. This thesis describes the phylogeny, function, expression patterns and regulation of the HDZip class I genes in the model species Arabidopsis thaliana. The phylogenetic analyses, traced duplication history and exon/intron organisation of the 17 class I genes in Arabidopsis show that the genes form six monophyletic groups, clades, with an origin in early plant evolution. All genes are expressed in broad tissue distribution patterns and the majority are responsive to water availability and/or light conditions. The expression of the genes show different patterns and dependence on environmental stress conditions, indicating evolutionary changes within and between clades. Ectopic expression of the genes suggest that they regulate genes in part by conserved mechanisms. Therefore, different functional roles seem to have evolved by a divergence mainly in the regulatory properties of the genes. Detailed expression analyses of the paralogous HDZip I genes ATHB7 and ATHB12 show that they have essentially overlapping patterns of activity in response to abscisic acid, ABA, or water deficit in leaves, stems and roots. The water deficit response of ATHB7 and -12 is mediated by ABA and depends on the protein phosphateses ABI1 and ABI2. Transgenic plants with ectopic expression of ATHB7 and/or -12, and athb7 and athb12 mutants, reveal that the genes in roots mediate the growth inhibitory effects of ABA. In this aspect of their function they do not overlap. In leaves and stems, the genes might act as growth regulators redundantly with other factors. Taken together these data suggest that ATHB7 and -12 regulate growth in response water deficit and that other HDZip I genes have related functions in response to environmental stress conditions.