In this study, the effects of melatonin-induced enhancement on the principal photosynthetic parameters and antioxidant machinery were investigated in Avena sativa (oat) plants exposed to polyethylene glycol (PEG)-induced osmotic stress. The parameters of growth, chlorophyll content, stomatal conductance, proline accumulation, lipid peroxidation, and electrolyte leakage showed noteworthy improvements between the groups. Melatonin treatment caused upregulation of the genes that encode the three major antioxidant enzymes: ascorbate peroxidase (APX), superoxide dismutase (SOD) and catalase (CAT). Chlorophyll-a fluorescence kinetic analyses revealed that melatonin treatment improved performance indices (PIABS and PItotal), quantum yields, and efficiencies of photosystem II (PSII) in oat plants subjected to PEG-induced osmotic stress. Furthermore, upregulation of five genes (PsbA, PsbB, PsbC, PsbD, and PsbO) that encode the core proteins of PSII implied melatonin exerted a positive influence on photosynthesis under conditions of osmotic stress.