Wheat is an important staple crop not only in Pakistan but all over the globe. Although the area dedicated to wheat cultivation expands annually, the quantity of wheat harvested is declining due to various biotic and abiotic factors. Global wheat production and output have suffered as a result of the drought, which is largely driven by a lack of water and environmental factors. Organic fertilizers have been shown to reduce the severity of drought. The current research was conducted in semi-arid climates to mitigate the negative effects of drought on wheat during its critical tillering (DTS), flowering (DFS), and grain filling (DGFS) stages through the application of three different abscisic acid treatments: ABA0 (0 mgL−1) control, ABA1 (100 mgL−1) and ABA2 (200 mgL−1). Wheat growth and yield characteristics were severely harmed by drought stress across all critical development stages, with the DGFS stage being particularly vulnerable and leading to a considerable loss in yield. Plant height was increased by 24.25%, the number of fertile tillers by 25.66%, spike length by 17.24%, the number of spikelets per spike by 16.68%, grain count per spike by 11.98%, thousand-grain weight by 14.34%, grain yield by 26.93% and biological yield by 14.55% when abscisic acid (ABA) was applied instead of the control treatment. Moreover, ABA2 increased the more physiological indices (water use efficiency (36.12%), stomatal conductance (44.23%), chlorophyll a (24.5%), chlorophyll b (29.8%), transpiration rate (23.03%), photosynthetic rate (24.84%), electrolyte leakage (− 38.76%) hydrogen peroxide (− 18.09%) superoxide dismutase (15.3%), catalase (20.8%), peroxidase (− 18.09%), and malondialdehyde (− 13.7%)) of drought-stressed wheat as compared to other treatments. In the case of N, P, and K contents in grain were maximally improved with the application of ABA2. Through the use of principal component analysis, we were able to correlate our results across scales and provide an explanation for the observed effects of ABA on wheat growth and production under arid conditions. Overall, ABA application at a rate of 200 mgL−1 is an effective technique to boost wheat grain output by mitigating the negative effects of drought stress.