Plants respond to environmental stresses by altering transcription of genes involved in the response. The chromatin modifier ATX1 regulates expression of a large number of genes; consequently, factors that affect ATX1 activity would also influence expression from ATX1-regulated genes. Here, we demonstrate that dehydration is such a factor implicating ATX1 in the plant's response to drought. In addition, we report that a hitherto unknown Arabidopsis gene, At3g10550, encodes a phosphoinositide 3'-phosphatase related to the animal myotubularins (AtMTM1). Myotubularin activities in plants have not been described and herein, we identify an overlapping set of genes co-regulated by ATX1 and AtMTM under drought conditions. We propose that these shared genes represent the ultimate targets of partially overlapping branches of the pathways of the nuclear ATX1 and the cytoplasmic AtMTM1. Our analyses offer first genome-wide insights into the relationship of an epigenetic factor and a lipid phosphatase from the other end of a shared drought responding pathway in Arabidopsis.