Water deficit is the main limiting factor constraining sugarcane productivity, and its impact is expected to increase due to climate changes. During prolonged drought periods, most plants become extremely vulnerable to ROS accumulation, which can severely damage their photosynthetic apparatus. The PetC gene, encoding a Rieske FeS protein (ISP), has been shown to regulate the electron transport chain and protect photosystems (PSs) under drought conditions in some plant species. In sugarcane, transcriptome analysis revealed that ScPetC is repressed during drought stress in the field. In this study, we have overexpressed ScPetC in tobacco plants and evaluated its role in water-deficit tolerance. Our results indicate that the ScPetC protein structure is conserved when compared to other species. ScPetC overexpression reduced the negative impact of water deficit on plant development. This effect was associated with a positive impact on ScPetC quantum efficiency and the electron transport rate of PSII, the photosynthetic rate, and water use efficiency. The total chlorophyll content under water deficit was higher in plants overexpressing ScPetC, and this was correlated with less chlorophyll degradation from oxidative damage. Together, these results demonstrate that ScPetC confers tolerance to water deficit and oxidative stresses, making it a candidate gene for crop improvement.