Invertase inhibitor (INH) post-translationally regulates the activity of invertase, which hydrolyzes sucrose into glucose and fructose, and plays essential roles in plant growth and development. However, little is known about the role of INH in growth and responses to environmental challenges in sweetpotato. Here, we identified and characterized an INH-like gene (IbINH) from sweetpotato. IbINH belongs to the pectin methylesterase inhibitor super family. IbINH transcript was the most abundant in storage roots. IbINH mRNA levels were significantly up-regulated in response to drought, abscisic acid (ABA), salicyclic acid (SA) and jasmonic acid (JA) treatments. Overexpressing IbINH in sweetpotato (SI plants) led to the decrease of plant growth and the increase of drought tolerance, while down-regulation of IbINH (RI plants) by RNAi technology resulted in vigorous growth and drought sensitivity. Furthermore, sucrose was increased and hexoses was decreased in SI plants, but the opposite results were observed in RI plants. Moreover, higher levels of sugars were accumulated in SI plants in comparison to non-transgenic plants (NT plants) and RI plants during water deficit. In addition, ABA biosynthesis-involved and abiotic stress response-involved genes were prominently up-regulated in SI plants under drought stress. Taken together, these results indicate that IbINH mediates plant growth and drought stress tolerance in sweetpotato via induction of source-sink strength and ABA-regulated pathway.