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Summary Water scarcity, resulting from climate change, poses a significant threat to ecosystems.Syntrichia ruralis, a dryland desiccation‐tolerant moss, provides valuable insights into survival of water‐limited conditions.We sequenced the genome ofS. ruralis, conducted transcriptomic analyses, and performed comparative genomic and transcriptomic analyses with existing genomes and transcriptomes, including with the close relativeS. caninervis. We took a genetic approach to characterize the role of anS. ruralistranscription factor, identified in transcriptomic analyses, inArabidopsis thaliana.The genome was assembled into 12 chromosomes encompassing 21 169 protein‐coding genes. Comparative analysis revealed copy number and transcript abundance differences in known desiccation‐associated gene families, and highlighted genome‐level variation among species that may reflect adaptation to different habitats. A significant number of abscisic acid (ABA)‐responsive genes were found to be negatively regulated by a MYB transcription factor (MYB55) that was upstream of theS. ruralisortholog of ABA‐insensitive 3 (ABI3). We determined that this conserved MYB transcription factor, uncharacterized inArabidopsis, acts as a negative regulator of an ABA‐dependent stress response inArabidopsis.The new genomic resources from this emerging model moss offer novel insights into how plants regulate their responses to water deprivation.