Field experiments during rabi seasons of 2017-18 and 2018-19 were conducted to asses the groundnut production, soil biological characteristics, micronutrient content in soil and plant parts, and their uptake influenced by graded levels of phosphorus (15, 30, 45 and 60 kg ha−1), Arbuscular Mycorrhizal Fungi (AMF) and Phosphorus Solubilizing Bacteria (PSB) application in Alfisols at Botany farm, Dr. BSKKV, Dapoli in a factorial randomized block design with twenty treatment combinations which were replicated thrice. Results indicated that higher dose of phosphours (60 kg ha−1), biofertilizers (AMF + PSB @ 10 kg ha−1 each) and their interaction was found prominent in augmenting the highest bacterial, actinomycetes, fungal populations. Further, the combined application of phosphate and the AMF and PSB strain at higher level significantly improved the enzyme activities viz., dehydrogenase, urease, alkaline and acid phosphatase, CO2 evolution and SMBC compared to lower dose of phosphorus and non-inoculated treatment was on par with application of phosphorus @ 45 kg ha−1 with dual inoculation of AMF + PSB @ 10 kg ha−1 each. However, DTPA-extractable micronutrients (Fe, Mn, Zn and Cu) status showed significant improvement because of various treatment combinations. Similarly, the application of phosphorus @ 60 kg ha−1 exhibited the highest uptake in edible portion of crops which was resulted in significantly highest pod yield (35.86 q ha−1) of groundnut which was at par with application of phosphorus @ 45 kg ha−1 (31.96 q ha−1) indicating beneficial effect for improving as well sustaining soil health in long term aspects.