Genetically engineered tobacco (Nicotiana tabacum L.) with the ability to synthesis glycinebetaine (GB) in chloroplasts was established by introducing the BADH gene for betaine aldehyde dehydrogenase from spinach (Spinacia oleracea L.). The genetic engineering resulted in enhanced tolerance of growth of young seedlings to salt stress. This increased tolerance was not due to improved water status, since there were no significant differences in accumulation of sodium and chloride, leaf water potential, and relative water content between wild type and transgenic plants under salt stress. Salt stress resulted in a decrease in CO2 assimilation and such a decrease was much greater in wild type plants than in transgenic plants. Though salt stress showed no damage to PSII, there were a decrease in the maximal PSII electron transport rate in vivo and an increase in non-photochemical quenching (NPQ) and these changes were greater in wild type plants than in transgenic plants. In addition, salt stress inhibited the activities of ribulose 1,5-bisphosphate carboxylase/oxygenase, chloroplastic fructose-1,6-bisphosphatase, fructose-1,6-bisphosphate aldolase, and phosphoribulokinase and such a decrease was also greater in wild type plants than in transgenic plants, suggesting that GB protects these enzymes against salt stress. However, there were no significant changes in the activities of phosphoglycerate kinase, triose phosphate isomerase, ribulose-5-phosphate isomerase, transketolase, and sedoheptulose-1,7-bisphosphatase in both wild type and transgenic plants. The results in this study suggest that enhanced tolerance of CO2 assimilation to salt stress may be one of physiological bases for increased tolerance of growth of transgenic plants to salt stress.