Drought and lack of nutrients (including nitrogen) limit crop production in arid and semi-arid regions, including Iran. In order to investigate the combined effect of nitrogen fertilizer sources (organic and chemical) under low water stress on soil properties, biological yield and peppermint essential oil, a three-year experiment in the years (2017–2019) was performed in the semi-arid region of Iran. The experiment was conducted as split plots in the form of randomized complete blocks with three replications. Experimental treatments include three irrigation regimes (irrigation at field capacity and after draining 25, 40 and 55% of usable water in the root zone) as the main factor and six fertilizer treatments based on plant nitrogen requirements (100% fertilizer, respectively). Chemical, without fertilizer, 50% chemical fertilizer + 50% azocompost, 100% vermicompost, 100% azocompost and 50% chemical fertilizer + 50% vermicompost) as sub-factors. The results showed that water-deficit conditions decreased organic carbon, total nitrogen content, soil phosphorus and potassium and biological yield and increased the percentage of peppermint essential oil. Also, in most of the treatment compositions of irrigation regime, the application of organic fertilizer (especially pure vermicompost and azocompost treatments) or combination with chemical fertilizer the increase organic carbon, macronutrients (nitrogen and phosphorus) and micro (iron and zinc) in soil solution, causing improved biological yield and essential oil content and moderated the effects of water-deficit stress on peppermint. In general, in water-deficit conditions such as Iran and the direction of sustainable agriculture and healthy medicine production, if the purpose of planting this plant is qualitative yield (percentage of essential oil) can be applied by applying severe water deficit and application vermicompost with the highest percentage of essential oil production, more Saves 50% on water consumption.