Together with auxins, cytokinins are the main plant morphogens involved in many different physiological processes. Given this knowledge, cytokinin levels can be manipulated by genetic modification in order to improve agronomic parameters of cereals in relation to, for example, morphology, yield, and tolerance to various stresses. The barley (Hordeum vulgare) cultivar Golden Promise was transformed using the cytokinin dehydrogenase 1 gene from Arabidopsis thaliana (AtCKX1) under the control of mild root-specific β-glucosidase promoter from maize. Increased cytokinin degradation activity was observed positively to affect the number and length of lateral roots. The impact on morphology depended upon the recombinant protein's subcellular compartmentation. While assumed cytosolic and vacuolar targeting of AtCKX1 had negligible effect on shoot growth, secretion of AtCKX1 protein to the apoplast had a negative effect on development of the aerial part and yield. Upon the application of severe drought stress, all transgenic genotypes maintained higher water content and showed better growth and yield parameters during revitalization. Higher tolerance to drought stress was most caused by altered root morphology resulting in better dehydration avoidance.