The use of saline water under drought conditions is critical for sustainable agricultural development in arid regions. Biochar is used as a soil amendment to enhance soil properties such as water-holding capacity and the source of nutrition elements of plants. Therefore, the experiment was conducted to evaluate the effects of biochar application on the morpho-physiological traits and yield of tomatoes under combined salinity and drought stress in greenhouses. There were 16 treatments consist two water quality fresh and saline (0.9 and 2.3 dS m−1), three deficit irrigation levels (DI) 80, 60, and 40% addition 100% of Evapotranspiration (ETc), and biochar application by rate 5% (BC5%) (w/w) and untreated soil (BC0%). The results indicated that the salinity and water deficit negatively affected morphological, physiological, and yield traits. In contrast, the application of biochar improved all traits. The interaction between biochar and saline water leads to decreased vegetative growth indices, leaf gas exchange, the relative water content of leaves (LRWC), photosynthetic pigments, and yield, especially with the water supply deficit (60 and 40% ETc), where the yield decreased by 42.48% under the highest water deficit at 40% ETc compared to the control. The addition of biochar with freshwater led to a significantly increased vegetative growth, physiological traits, yield, water use efficiency (WUE), and less proline content under all various water treatments compared to untreated soil. In general, biochar combined with DI and freshwater could improve morpho-physiological attributes, sustain the growth of tomato plants, and increase productivity in arid and semi-arid regions.