Climate change-driven water scarcity and heavy metal contamination pose significant challenges to sustainable agriculture in arid and semi-arid regions. This study examines the combined effects of drought and Ni stress on the physiological and biochemical responses of sweet basil (Ocimum basilicum L.) and explores the potential mitigation provided by the root endophyte Piriformospora indica. Basil plants were grown under factorial combinations of three Ni levels (0, 165, 220 mg kg⁻¹), three drought conditions (100 %, 75 %, 50 % of field capacity), and with or without P. indica inoculation. Results showed that drought and Ni stress significantly decreased growth, photosynthetic efficiency, pigment stability, total soluble protein, and vitamin C content. Conversely, oxidative markers (H₂O₂, MDA, proline) and antioxidant enzyme activities (APX, GPX, SOD), along with total phenolics and FRAP activity, increased. P. indica inoculation notably enhanced shoot biomass, preserved pigment levels, improved photosystem II efficiency, and increased soluble protein and vitamin C, while reducing oxidative and osmotic markers and limiting Ni accumulation and translocation in basil tissues. The endophyte also modulated both enzymatic and non-enzymatic antioxidant responses, indicating a reduction in stress intensity. Additionally, P. indica inoculation under combined drought and Ni stress significantly enhanced essential oil content and modulated the relative abundance of key constituents such as methyl chavicol, linalool, and 1,8- cineole, highlighting its role in promoting secondary metabolite production in basil. These findings suggest that P. indica is a promising biological agent for boosting basil resilience and productivity under combined drought and heavy metal stress, offering sustainable options for crop management in challenging agroecosystems.