Drought is a major environmental factor limiting wheat production worldwide, and developing drought-tolerant cultivars is a central challenge for wheat breeders globally. It is therefore important to identify genetic components determining drought tolerance in wheat. Here, we identified a NAC gene (TaNAC071-A) by genome-wide association study, which is tightly associated with drought tolerance in wheat. TaNAC071-A knockdown in wheat attenuates plant drought tolerance, whereas its overexpression significantly enhanced drought tolerance through improved water-use efficiency and activated expression of stress-responsive genes. This heightened water-saving mechanism further mitigates the yield loss caused by water deficit. Further candidate gene association analysis showed that a 108-bp insertion in the promoter of TaNAC071-A alters its expression level and contributes to variation in drought tolerance among wheat accessions. This insertion contains two MYB cis-regulatory elements (CREs) that can be directly bound by the MYB transcription activator, TaMYBL1, thereby leading to increased TaNAC071-A expression and plant drought tolerance. In addition, introgression of this 108-bp insertion allele TaNAC071-AIn-693 into drought-sensitive cultivars improves drought tolerance, thus demonstrating a valuable genetic resource for wheat breeding. These findings highlight a major breakthrough in determining the genetic basis underlying phenotypic variation in wheat drought tolerance, and reveal the molecular mechanism and potential application of the CRE-containing indels in regulating gene expression involved in important agronomical traits.