Water deficiency causes a dramatic reduction in crop production globally. Breeding crop varieties that are more efficient in their water use is one strategy to overcome this predicament. In this study, a member of the LRR-RLKs family, the Populus nigra x (Populus deltoides x Populus nigra) ERECTA (PdERECTA) gene was cloned. To study the biological functions of PdERECTA, transgenic Arabidopsis plants (35S:PdERECTA) that constitutively expressed the PdERECTA gene were constructed. Overexpression of PdERECTA resulted in early seedling establishment, longer primary roots, and larger leaf areas. Notably, transgenic Arabidopsis overexpressing PdERECTA resulted in enhanced long-term water use efficiency (WUEl), as estimated by the analysis of carbon isotopic discrimination. The WUEl results were supported by the physiological and anatomical results, which included improved photosynthetic rate, decreased transpiration rate, and stomatal density. The transgenic lines have significantly more dry-biomass as compared to the wild type. Since the overexpression of PdERECTA can strongly enhance the water use efficiency in transgenic Arabidopsis plants, PdERECTA could potentially be used in transgenic breeding to improve the water use efficiency.