Drought is a major environmental factor limiting wheat production worldwide. However, the genetic components underlying wheat drought tolerance are largely unknown. Here, we identify a DREB transcription factor gene (TaDTG6-B) by genome-wide association study, which is tightly associated with drought tolerance in wheat. Further candidate gene association analysis reveal that a 26-bp deletion in TaDTG6-B coding region induces gain-of-function for the TaDTG6-BDel574 protein, which exhibits stronger transcriptional activation, protein interactions, and binding activity with DRE/CRT cis-elements than that of the TaDTG6-BIn574 variant, ultimately confers higher drought tolerance in wheat seedlings harboring this variation. TaDTG6-BDel574 knockdown attenuates drought tolerance in transgenic wheat, whereas its overexpression results in significantly enhanced drought tolerance without accompanying phenotypic abnormalities. Furthermore, introgression of the TaDTG6-BDel574 elite allele into drought sensitive cultivars improves drought tolerance, thus providing a valuable genetic resource for wheat breeding. Combined DNA affinity purification sequencing and RNA sequencing analyses revealed 268 putative target genes that are directly bound and transcriptionally regulated by TaDTG6-BDel574. Further analysis show that TaDTG6-BDel574 positively regulates TaPIF1 expression to enhance wheat drought tolerance. These results describe the genetic basis and accompanying mechanism driving phenotypic variation in wheat drought tolerance, and provides a novel genetic resource for crop breeding programs.