Differential light conditions, such as variations in photoperiod, light quality, and light intensity, play a crucial role as external factors that can influence plant morphogenesis and secondary metabolism. However, there is still a lack of understanding of how Artemisia annua responds to monochromatic and dichromatic light regimes in terms of the different physiological mechanisms that control plant growth and secondary metabolite production. Therefore, the primary aim of this study was to investigate and assess the various physiological parameters, biochemical analysis, and molecular aspects in detail. Therefore, the plantlets were exposed to LED lighting such as monochromatic red light (R), monochromatic blue light (B), white light (W), and a combination of red and blue light (RB, 1:1) at a PPFD (photosynthetic photon flux density) of 200 mol. m−2. s−1 for 10 days. Our results indicate that exposure to RB light resulted in an immense increase in ROS accumulation, flavonoids, lignin, and artemisinin by 4.7-fold, 44%, and 53.4%, respectively, in contrast to W light. Whereas blue light led to increments of 160.2% in phenolic and 107.9% in anthocyanin content. RB and B light also influence the parameters of chlorophyll fluorescence, as well as leaf area, stomatal density, trichome size, antioxidant enzyme activity, and the production of more secondary metabolites to combat oxidative stress. Real-time PCR analysis of biosynthetic pathway-associated genes HMGR, DXR, DXS, FPS, ADS, CYP71AVI, DBR2, ALDH1, and flavonoid key biosynthesis pathway genes PAL, C4H, 4CL, CHS, and F3′H showed the highest increment under RB, light followed by B and R light exposure. Further, RB LED light has significant potential for enhancing natural bio-active compounds as revealed by Raman spectroscopy, such as camphor, limonene, terpene-4-ol, α pinene, 1,8-cineole, β-caryophyllene, artemisinin, kaempferol, luteolin, rutin, and caffeic acid in A. annua. Taken together, red and blue LEDs can serve as significant elicitors for the production of commercially important metabolites.