The genus Ocimum, which belongs to the Lamiaceae family, encompasses a wide variety of herbs and shrubs, with over 60 species originating from tropical regions. These plants are widely cultivated for their essential oils, which are used in culinary, medicinal, and aromatic applications. However, prolonged exposure to water scarcity can negatively impact the growth and essential oil production of Ocimum species. There is limited information available on how Ocimum basilicum ‘Ohře’ and O. americanum respond to drought stress. Consequently, two-year studies (2021 and 2022) were conducted to investigate the physiological, morphological, and biochemical changes occurring in those two basil plants under three different soil water regimes (70%, 50%, and 30% of soil water capacities ‘SWC’). The findings of these studies demonstrated that drought stress significantly affected physiological indicators, hindered the growth and development of the examined Ocimum species, and altered their essential oil production. Due to severe drought stress both basil plants lost over 14% of their leaf relative water content and more than 60% reduction in water potential. Consequently, basil plants lost over 45% of their biomass (dry and fresh) and essential oil yield when the soil became drier (30% SWC). Conversely, dry soil conditions enhanced water use efficiency, SPAD value, glandular hair density (increased by over 60%), essential oil concentration (increased by 10%), and phenol concentration. Additionally, the essential oil constituents were mildly affected, with the effects dependent on factors such as species, production year, drought intensity, and specific essential oil compounds. In conclusion, these studies have demonstrated that prolonged exposure to water scarcity limits growth and alters the biochemical constituents of both Ocimum species. Therefore, to secure maximum biomass and essential oil yield under protected cultivation, it is recommended to maintain at least 70% soil water capacity.