To mitigate the adverse effects of climate change, development of stress-resilient crops has assumed widespread significance. Though, the dehydration-responsive element binding protein (DREB) transcription factors have been demonstrated to be crucial for stress tolerance in model plants, their role in economically important crops largely remain unclear. In the present study, the role of MusaDREB1G in overcoming drought or cold tolerance was investigated in banana, a plant that is vital for global agriculture and food security. Stress profiling revealed transcription of MusaDREB1G to alter in response to with drought, cold, salinity, or ABA exposures, which was corroborated with stress-induced activation of Pro MusaDREB1G-GUS. Pro MusaDREB1G, which harbors various-stress-associated cis-elements, was primarily active in vascular tissues under control growth conditions. Interestingly, in response to drought, salinity, or cold, the Pro MusaDREB1G was also activated in non-vascular tissues. Overexpression of MusaDREB1G led to a dwarf phenotype, but surprisingly these banana lines showed improved drought or cold tolerance. The overexpression line was characterized in detail to obtain mechanistic insights into this phenomenon. Results showed a distinct elevation in abscisic acid (ABA) and jasmonic acid (JA) content, which correlated well with enhanced expression of stress-related genes in transgenic lines. These findings unveil a novel MusaDREB1G-driven common mechanism for cold/drought tolerance and paves the way for engineering stress-resistant banana crops using MusaDREB1G.