<p>Soil salinity has emerged as a global issue threatening agriculture and environment, leading to reduced agriculture productivity and environmental degradation. Plant CCCH (C3H) zinc finger proteins (ZFPs) are pivotal transcription factors of growth and development. <i>Cynodon dactylon</i>, commonly known as bermudagrass, is characterized as a major perennial turfgrass in warm-season climates exhibiting superior salt-tolerance. A stress inducible <i>CdZFP3</i> from bermudagrass was isolated for functional analysis and its regulatory mechanism was excavated in salt tolerance. CdZFP3 contained five C-X₈-C-X₅-C-X₃-H-zinc-finger repeats and belonged to the C3H family. Expression of <i>CdZFP3</i> was upregulated by salt, cold, drought, and abscisic acid application. Five independent T1 transgenic <i>Arabidopsis</i> plants overexpressing <i>CdZFP3</i> were achieved, and T2 generation plants of three lines were used for physiological and biochemical experiments. The overexpressed plants showed enhanced germination rate, higher photosynthetic capacity, lower electrolyte leakage, increased K⁺ content and elevated K⁺/Na⁺ under salinity stress conditions. In addition, transgenic lines exhibited elevated levels of proline and soluble sugar along with decreased reactive oxygen species accumulation. Consistent with the observed physiological improvements, the transcription levels of key stress-responsive genes, including those regulating ionic homeostasis (<i>AtNHX1</i>, <i>AtSOS1</i>), proline biosynthesis (<i>AtP5CS</i>) and antioxidant system (<i>AtAPX1</i>, <i>AtSOD</i>, <i>AtPOD</i>), were significantly improved in transgenic plants. <i>CdZFP3</i> enhanced salt tolerance by coordinately strengthening osmoregulation, salt exclusion and reactive oxygen species scavenging. <i>CdZFP3</i> could be an interesting candidate gene in molecular breeding for salt tolerance.</p>