Drought stress is one of the most significant environmental challenges, leading to various changes in the physiological processes of plants. Gamma-aminobutyric acid (GABA) is an essential biomolecule that plays a critical role in regulating growth and stress signaling. The current study aims to investigate the effects of GABA on antioxidant enzyme activity and the essential oil composition of Thymus daenensis Celak under different levels of water deficit stress. We examined three different levels of soil moisture (90%, 60%, and 30% of field capacity) alongside three GABA foliar treatments (0 mM, 25 mM, 50 mM, and 75 mM). The results showed that applying 25 mM GABA under severe stress conditions (at 30% of field capacity) significantly increased the activity levels of ascorbate peroxidase, guaiacol peroxidase, and superoxide dismutase enzymes by 95.5%, 78.45%, and 38%, respectively. Additionally, applying GABA at various levels during different water stress treatments led to significant improvements in the chlorophyll, carotenoid, and proline content in leaf tissues. Specifically, the application of 25, 50, and 75 mM GABA enhanced the proline content in T. daenensis by 53.9%, 26.8%, and 11%, respectively, compared to the control group (non-application of GABA). Essential oil analysis revealed the following ranges: thymol was present in the range of 38.07–45.18%, cymene in the range of 5.13–14.10%, caryophyllene in the range of 4.3–23.01%, and cineole in the range of 2–4.15%. The highest amount of thymol was obtained in the absence of GABA at 30% field capacity, while the greatest amount of cymene was also observed without GABA at 90% field capacity. Additionally, the maximum concentration of caryophyllene was found when 50 mM GABA was applied at 90% field capacity, and the maximum level of cineole was detected with 75 mM GABA at 90% field capacity. In conclusion, the exogenous application of GABA demonstrated favorable efficacy, particularly at a concentration of 25 mM. This treatment resulted in a significant enhancement of the plant's defense mechanisms and created favorable conditions that notably impacted the quality of the essential oil produced by T. daenensis.