Drought stress is a major abiotic constraint limiting crop productivity and ecosystem stability in arid and semi-arid regions. The use of stress-adapted plant growth–promoting rhizobacteria (PGPR) represents a sustainable strategy to enhance crop resilience while maintaining soil ecological function. This study characterized a desert-adapted, halotolerant Exiguobacterium sp. C-20, isolated from the rhizosphere of Panicum antidotale in the Cholistan Desert (Pakistan), for its plant growth–promoting traits and its ability to mitigate drought stress under controlled conditions. The strain exhibited strong phosphate-solubilizing activity, produced indole-3-acetic acid (IAA), and generated ammonia in vitro, confirming its functional potential as a PGPR. In greenhouse experiments, seed and soil inoculation of maize (Zea mays L.) hybrids (G-3 and G-7) exposed to drought (40% field capacity) significantly improved photosynthetic performance, stomatal conductance, chlorophyll stability (SPAD values), biomass accumulation, and tissue moisture content compared with non-inoculated controls. These improvements reflect enhanced plant physiological performance under water deficit rather than speculative mechanisms. Overall, the findings identify Exiguobacterium sp. C-20 as a promising microbial resource for developing eco-sustainable bioinoculants to improve drought tolerance and productivity in dryland agroecosystems. © The Author(s), under exclusive licence to Springer Nature B.V. 2026.