Melatonin (MEL) is a ubiquitous molecule with pleiotropic roles in plant adaption to stress. In this study, we investigated the effects of foliar spray of 100 and 200 μM MEL on the biochemical and physiological traits linked with the growth performance of olive seedlings exposed to moderate (45 mM NaCl) and severe (90 mM NaCl) salinity. Both salt stress conditions caused a considerable reduction in leaf relative water content and the contents of photosynthetic pigments (carotenoids, chlorophylls a and b, and total chlorophylls), K+ and Ca+2, while the contents of Na+ and the activities of antioxidant enzymes increased. In addition, salt‐stressed olive seedlings showed high accumulations of hydrogen peroxide (H2O2), malondialdehyde (MDA), and electrolyte leakage (EL), indicating that olive seedlings suffered from salinity‐induced oxidative damage. In contrast, MEL application revived the growth of olive seedlings, including shoot height, root length and biomass under salt stress conditions. MEL protected the photosynthetic pigments and decreased the Na+/K+ ratio under both moderate and severe salt stresses. Furthermore, MEL induced the accumulations of proline, total soluble sugars, glycine betaine, abscisic acid, and indole acetic acid in salt‐stressed olive seedlings, which showed a positive correlation with improved leaf water status and biomass. MEL application also increased the activities of catalase, superoxide dismutase, ascorbate peroxidase, and peroxidase in salt‐stressed seedlings, resulting in lower levels of H2O2, MDA, and EL in these plants. Taken together, MEL mitigates salinity through its roles in various biochemical and physiological processes, thereby representing a promising agent for application in crop protection.