Organic farming and low-input production agroecosystems are the major components of sustainable agriculture; therefore, application of biofertilizers containing beneficial soil microorganisms to reduce environmental difficulties related to the use of chemical and manufactured fertilizers is the first step towards sustainability. Considering the importance of the production of medicinal and aromatic plant materials in sustainable ways, a 2-year field research was done as a split factorial experiment based on a randomized complete block design with three replicates. Three factors were investigated: (1) water-deficit stress in three levels comprising irrigation after 30%, 60%, and 90% depletion of available soil water (ASW) as main factor, (2) zeolite application (0 and 8 t ha− 1), and (3) seed inoculation with biofertilizers including nitroxin, phosphate barvar-2, and mixture of nitroxin × phosphate barvar-2, and the control (non-inoculation) as subplots. Results showed that the examined traits such as leaf relative water content, chlorophyll a and b, and total chlorophyll contents, leaf soluble sugars and proline contents, flower yield, essential oil percentage and yield, and irrigation water use efficiencies for flower yield ( IWUEFY) and for essential oil yield ( IWUEEOY) were significantly (p < 0.05) influenced by experimental treatments in dragonhead for both years. According to second-order interaction among treatment groups, the highest IWUEEOY (3.117 ml m− 3) was obtained in nitroxin × phosphate barvar-2 and zeolite treatments under 60% depletion of ASW. A positive and highly significant (r0.01 = 0.85 and 0.98) correlation was observed between essential oil content and essential oil yield and IWUEEOY, respectively. Regarding significant interaction between biofertilizers and zeolite, the treatment combinations of zeolite and nitroxin × phosphate barvar-2 could improve physiological functions and essential oil yield of dragonhead plants following irrigation aft