Alfalfa (Medicago sativa L.) is a prominent and distinct species within the pasture germplasm innovation industry. However, drought poses a substantial constraint on the yield and distribution of alfalfa by adversely affecting its growth. Although lineage-specific genes are instrumental in modulating plant responses to stress, their role in mediating alfalfa's tolerance to drought stress has yet to be elucidated. In this study, a total of 199 alfalfa-specific genes (ASGs) and 3054 legume-specific genes (LSGs) were identified in alfalfa. Compared with evolutionarily conserved genes, ASGs have shorter sequence length and fewer or no intron. Many alfalfa ASGs can be induced by various abiotic stresses, and the capability of MsASG166 to enhance drought resistance has been substantiated through transgenic research in both yeast and Arabidopsis thaliana. The RNA-Seq and WGCNA analyses revealed that DREB2A and MADS are pivotal genes in the molecular mechanisms through which MsASG166 positively modulates plant drought resistance. This study marks the first identification of lineage-specific genes in alfalfa and an examination of the molecular roles of the MsASG166 gene in drought stress responses. The findings offer valuable genetic resources for the development of novel, genetically engineered alfalfa germplasm with enhanced drought tolerance.