Amidst depleting water resources, rising crop water needs, changing climates, and soil fertility decline from inorganic modifications of soil, the need for sustainable agricultural solutions has been more pressing. The experimental work aimed to inspect the potential of organically activated biochar in improving soil physicochemical and nutrient status as well as improving biochemical and physiological processes, and optimizing yield-related attributes under optimal and deficit irrigation conditions. Biochar enhances soil structure, water retention, and nutrient availability, while improving plant nutrient uptake and drought resilience. The field experiment with maize crop was conducted in Hardaas Pur (32°38.37’N, 74°9.00’E), Gujrat, Pakistan. The experiment involved the use of DK-9108, DK-6321, and Sarhaab maize hybrid seeds, with five moisture levels of evapotranspiration (100% ETC, 80% ETC, 70% ETC, 60% ETC, and 50% ETC) maintained throughout the crop seasons. Furthermore, activated biochar was applied at three levels: 0 tons/ha (no biochar), 5 tons per hectare, and 10 tons per hectare. The study’s findings revealed significant improvements in soil organic matter, bulk density, nutrient profile and total porosity with biochar supplementation in soil. Maize plants grown under lower levels of ETC in biochar supplemented soil had enhanced membrane stability index (1.6 times higher) increased protein content (1.4 times higher), reduced malondialdehyde levels (0.7 times lower), improved antioxidant enzyme activity (1.3 times more SOD and POD activity, and 1.2 times more CAT activity), improved relative growth (1.05 times more) and enhanced yield parameters (26% more grain and stover yield, 16% more 1000-seed weight, 29% more total seed weight, 33% more apparent water productivity) than control. Additionally, among the two biochar application levels tested, the 5 tons/ha dose demonstrated superior efficiency compared to the 10 tons/ha biochar dose.