It has been challenging to simultaneously improve photosynthesis and stress tolerance in plants. Crassulacean acid metabolism (CAM) is a CO2-concentrating mechanism that facilitates plant adaptation to water-limited environments. We hypothesized that the ectopic expression of a CAM-specific phosphoenolpyruvate carboxylase (PEPC), an enzyme that catalyzes primary CO2 fixation in CAM plants, would enhance both photosynthesis and abiotic stress tolerance. To test this hypothesis, we engineered a CAM-specific PEPC gene (named AaPEPC1) from Agave americana into tobacco. In comparison with wild-type and empty vector controls, transgenic tobacco plants constitutively expressing AaPEPC1 showed a higher photosynthetic rate and biomass production under normal conditions, along with significant carbon metabolism changes in malate accumulation, the carbon isotope ratio δ13C, and the expression of multiple orthologs of CAM-related genes. Furthermore, AaPEPC1 overexpression enhanced proline biosynthesis, and improved salt and drought tolerance in the transgenic plants. Under salt and drought stress conditions, the dry weight of transgenic tobacco plants overexpressing AaPEPC1 was increased by up to 81.8% and 37.2%, respectively, in comparison with wild-type plants. Our findings open a new door to the simultaneous improvement of photosynthesis and stress tolerance in plants.