Arid regions of Rajasthan province of India have very low productivity and due to hungry and thirsty soil it further affected by continuous and inappropriate tillage and fertilizer management practices. This posing a serious threat to the sustainability of peanut cultivation in these degraded soils of arid region of Thar desert. A two year study was piloted to explore the efficient tillage and fertilizer management practices and their influence on crop and water productivity and nutrient uptake in peanut. The experiment was planned with three tillage practices in main plots and six fertilizer management options in sub plots, and replicated four times. Deep tillage (DT) (25 cm) contributed significantly higher pod (2.98 Mg ha− 1), kernel (2.16Mg ha− 1), protein (0.24 Mg ha− 1), and oil (0.91 Mg ha− 1) yield which were respectively 13, 26, 26 and 28% higher over the minimum tillage (MT). DT also recorded higher water productivity and crop profitability by 12.2 and 13.3% respectively, compared to MT. MT recorded the higher energy use efficiency (EUE) by 10.2% and energy profitability (EP) by 12.5% compared to DT, respectively. Among nutrient management options peanut (20kg N + 32 kg P + 15 kg K ha− 1) (RDF) along with seed inoculation with arbuscular mycorrhizal fungi (AMF) and phosphorus solubilizing bacteria (PSB) recorded significantly higher pod (3.50 Mg ha− 1), kernel (2.59 Mg ha− 1), protein (0.29 Mg ha− 1), and oil (1.11 Mg ha− 1) yields compared to RDF without seed inoculation (respectively, 2.86, 2.12, 0.24 and 0.89 Mg ha− 1). Also recorded the maximum water productivity (8.27 kg ha− 1), net return (2708.32), EUE (10.89 MJ ha− 1), and EP (0.18 kg MJ− 1) over rest of the nutrient management practices. Thus, deep tillage along with RDF + PSB + AMF (2 kg ha− 1) enhanced peanut pod, kernel, protein and oil yields as well as peanut water productivity and economic returns under alkaline soils of arid region.