Rapid growth and scattered plant types are urgent issues for potted Melaleuca alternifolia. An effective strategy for dwarfing cultivation is the exogenous application of plant growth regulators (PGRs) to plants. However, for many non-wood forest species, there is currently limited understanding of the regulatory mechanism of dwarfing effects of PGRs, which greatly limits the application of PGRs. In this study, three PGRs, paclobutrazol (PP333), uniconazole (S3307), and chlormequat chloride (CCC) were applied to dwarf terpinen-4-ol M. alternifolia. By observing the morphological characteristics and leaf anatomy of M. alternifolia after dwarfing and measuring its photosynthetic characteristics and physiological and biochemical indexes, the dwarfing effect of the three PGRs and the underlying mechanisms were investigated to provide a reference for the cultivation of M. alternifolia by dwarfing. The results show that the PP333 (P3) treatment at 2000 mg·L−1 had the best dwarfing effect on M. alternifolia, with a compact plant shape, thicker stems, and green leaf color. At the same time, it increased the chlorophyll contents, changed the blade structure, increased the content of soluble substances and the activity of antioxidant enzymes, increased the endogenous hormones indole-3-acetic acid (IAA), gibberellin A3 (GA3), and trans-zeatin-riboside (ZR), and decreased abscisic acid (ABA) levels.