Eukaryotic genomes contain a vast diversity of transposable elements (TEs). Formerly often described as selfish and parasitic DNA sequences, TEs are now recognized as a source of genetic diversity and powerful drivers of evolution. Yet, because their mobility is tightly controlled by the host, studies experimentally assessing how fast TEs may mediate the emergence of adaptive traits are scare. We exposed Arabidopsis thaliana high-copy TE lines (hcLines) with up to ~8 fold increased copy numbers of the heat-responsive ONSEN TE to drought as a straightforward and ecologically highly relevant selection pressure. We provide evidence for increased drought tolerance in five out of the 23 tested hcLines and further pinpoint one of the causative mutations to an exonic insertion of ONSEN in the ribose-5-phosphate-isomerase 2 gene. The resulting loss-of-function mutation caused a decreased rate of photosynthesis, plant size and water consumption. Overall, we show that the heat-induced transposition of a low-copy TE increases phenotypic diversity and leads to the emergence of drought-tolerant individuals in Arabidopsis thaliana. This is one of the rare empirical examples substantiating the adaptive potential of mobilized stress-responsive TEs in eukaryotes. Our work demonstrates the potential of TE-mediated loss-of-function mutations in stress adaptation.