Drought is a potent abiotic stressor that arrests crop growth, significantly affecting crop health and yields. The arbuscular mycorrhizal fungi (AMF), and plant growth-promoting rhizobacteria (PGPR) can offer to protect plants from stressful environments through improving water, and nutrient use efficiency by strengthening plant root structure and harnessing favorable rhizosphere environments. When Acaulospora laevis (AMF) and Bacillus subtilus (PGPR) are introduced in combination, enhanced root growth and beneficial microbial colonization can mitigate drought stress. To assess this potential, a pot experiment was done with maize (Zea mays L.) to explore the effects of A. laevis and B. subtilus under different water levels (well-watered = 80 %; moderate water stress = 55 %; and severe water stress = 35 %) on maize yield, soil microbial activities, nutrients contents, root, and leaf functioning. Plants exposed to severe drought stress hampered their root and leaf functioning, and reduced grain yield compared with control plants. Combined use of AMF and PGPR increased root colonization (104.6 %–113.2 %) and microbial biomass carbon (36.38 %–40.23 %) under moderate to severe drought conditions over control. Higher root colonization was strongly linked with elevated ACC (aminocyclopropane-1-carboxylic acid) production, subsequently enhancing water use efficiency (21.62 %–12.77 %), root hydraulic conductivity (1.9 %–1.4 %) and root nutrient uptake under moderate to severe drought conditions. Enhanced nutrient uptake further promoted leaf photosynthetic rate by 27.3 %–29.8 % under moderate and severe drought stress. Improving leaf and root physiological functioning enhanced maize grain yield under stressful environments. Furthermore, co-inoculation with AMF-PGPR reduced cellular damage by lowering oxidative enzyme levels and increasing antioxidative enzyme activities, improving plant performance and grain yield under stressful environments. Conclusively, the synergistic interaction of AMF with PGPR ensured plant stress tolerance by reducing cellular injury, facilitating root-leaf functioning, enhancing nutrient-water-use-efficiencies, and increasing yield under drought stress.