Drought stress retards plant growth and yield. Melatonin and nitric oxide (NO) have demonstrated their potential role against abiotic stresses; however, the underlying molecular mechanism by which they interact and extend drought stress tolerance has not been fully elucidated. Herein, the current study was performed to establish the optimum beneficial concentration of MT and NO in combating drought stress and later understand its responses at biochemical, and molecular levels. Results showed exogenous MT, and sodium nitroprusside (SNP as NO donor) have counteracted drought-induced growth inhibition of soybean (Glycine max L.) by increasing plant biomass, photosynthesis efficiency and water content and reducing reactive oxygen species accumulation. MT and NO treatments showed reduced lipid peroxidation and improved defense responses via significantly higher antioxidant enzyme activities than control during drought. Surprisingly, endogenous abscisic acid (ABA) contents and gene expression of its synthesis and ABA-responsive proteins and their promoters were significantly decreased in drought by MT + NO. This was coupled with an increase in endogenous MT levels. In endo-NO regulations, S-nitrosoglutathione was increased, but L-NAME (NO inhibitor) and cPTIO (NO scavenger) decreased the S-nitrosothiol (SNO) contents, which was followed by the increased expression of NO-synthesis-related-genes by MT + NO. Interestingly, MT + NO-induced drought stress tolerance was coupled with increased expression of transcription factors such as GmWRKY27 and GmMYB174. Conclusively, the physiological, antioxidant, and molecular analysis showed that MT triggers downregulated NO accumulation, promoting tolerance against drought stress.