Global warming in this century increases incidences of various abiotic stresses restricting plant growth and productivity and posing a severe threat to global food production and security. The plant produces different osmolytes and hormones to combat the harmful effects of these abiotic stresses. Melatonin (MT) is a plant hormone that possesses excellent properties to improve plant performance under different abiotic stresses. It is associated with improved physiological and molecular processes linked with seed germination, growth and development, photosynthesis, carbon fixation, and plant defence against other abiotic stresses. In parallel, MT also increased the accumulation of multiple osmolytes, sugars and endogenous hormones (auxin, gibberellic acid, and cytokinins) to mediate resistance to stress. Stress condition in plants often produces reactive oxygen species. MT has excellent antioxidant properties and substantially scavenges reactive oxygen species by increasing the activity of enzymatic and non-enzymatic antioxidants under stress conditions. Moreover, the upregulation of stress-responsive and antioxidant enzyme genes makes it an excellent stress-inducing molecule. However, MT produced in plants is not sufficient to induce stress tolerance. Therefore, the development of transgenic plants with improved MT biosynthesis could be a promising approach to enhancing stress tolerance. This review, therefore, focuses on the possible role of MT in the induction of various abiotic stresses in plants. We further discussed MT biosynthesis and the critical role of MT as a potential antioxidant for improving abiotic stress tolerance. In addition, we also addressed MT biosynthesis and shed light on future research directions. Therefore, this review would help readers learn more about MT in a changing environment and provide new suggestions on how this knowledge could be used to develop stress tolerance.