Global climate change has exacerbated drought stress episodes, which are emerging as a serious threat to plant growth and productivity worldwide. In this context, melatonin has emerged as a potential signaling molecule for improved drought tolerance in plants, primarily through enhanced antioxidant defenses. Here, physiological, transcriptome, and metabolome analyses were used to investigate the physiological and molecular mechanisms of melatonin in drought stress mitigation in A. mongolicum with both drought-tolerant and drought-sensitive genotypes. Physiological results suggest that melatonin improves drought tolerance in A. mongolicum primarily by enhancing the antioxidant enzyme system. Integrated transcriptomic and metabolomic analyses have demonstrated that the tryptophan metabolic pathway plays a crucial role in melatonin-mediated enhancement of drought resistance. Notably, we report on the drought-related gene AmASMT, which encodes a melatonin biosynthesis enzyme and contributes to drought stress tolerance in A. mongolicum. We found that the AmASMT overexpressing rice lines exhibited higher endogenous melatonin levels and increased tolerance to drought stress by promoting antioxidant systems. Our findings indicate that the AmASMT plays a crucial role in regulating melatonin biosynthesis A. mongolicum while facilitating protection against drought stress. These results provides a basis for exploiting melatonin-mediated mechanisms and genetic engineering approaches to enhance plant drought tolerance.