SummaryAbscisic acid (ABA) is a key phytohormone involved in adaption to environmental stress and regulation of plant development. Clade A protein phosphatases type 2C (PP2Cs), such as HAB1, are key negative regulators of ABA signaling in Arabidopsis. To obtain further insight into regulation of HAB1 function by ABA, we have screened for HAB1‐interacting partners using a yeast two‐hybrid approach. Three proteins were identified, PYL5, PYL6 and PYL8, which belong to a 14‐member subfamily of the Bet v1‐like superfamily. HAB1–PYL5 interaction was confirmed using BiFC and co‐immunoprecipitation assays. PYL5 over‐expression led to a globally enhanced response to ABA, in contrast to the opposite phenotype reported for HAB1‐over‐expressing plants. F2 plants that over‐expressed both HAB1 and PYL5 showed an enhanced response to ABA, indicating that PYL5 antagonizes HAB1 function. PYL5 and other members of its protein family inhibited HAB1, ABI1 and ABI2 phosphatase activity in an ABA‐dependent manner. Isothermal titration calorimetry revealed saturable binding of (+)ABA to PYL5, with Kd values of 1.1 μm or 38 nm in the absence or presence of the PP2C catalytic core of HAB1, respectively. Our work indicates that PYL5 is a cytosolic and nuclear ABA receptor that activates ABA signaling through direct inhibition of clade A PP2Cs. Moreover, we show that enhanced resistance to drought can be obtained through PYL5‐mediated inhibition of clade A PP2Cs.