Drought stress is a prevalent environmental stress that adversely affects agricultural industries worldwide. In this study, bacterial isolates, AFFR02 and Mj1212, showed tolerance to polyethylene glycol-induced (PEG) drought stress (approximately 15%) and possess strong phosphate-solubilizing capacity. Moreover, we investigated the plant growth attributes, chlorophyll content, and ion uptake in alfalfa plants (Medicago sativa L) inoculated with isolates AFFR02 and Mj1212 under drought stress. We observed that drought stress drastically affects alfalfa’s growth attributes: shoot length: SL (24.88%), root length: RL (29.62%), shoot fresh weight: SFW (49.62%), root fresh weight: RFW (45.09%), stalk diameter: SD (52.84%), and chlorophyll content: CC (19.2%). However, in bacterial-inoculated alfalfa plants, the growth attributes significantly recovered were SL (12.42%), RL (21.30%), SFW (50.74%), RFW (46.42%), SD (76.72%), and CC (17.98%). In drought-stressed alfalfa plants, we observed a significant decrease in the relative water content (7.45%), whereas there was an increase in electrical conductivity (68.87%) and abscisic acid contents (164.42%). Antioxidant analysis showed a significant increase in total phenolic content (46.08%), DPPH-scavenging activity (39.66%), total flavonoid (13.68%), and superoxide dismutase (28.51%) in alfalfa treated with drought stress and bacterial isolates AFFR02 and Mj1212 simultaneously. Moreover, an increase in inductively coupled plasma (ICP) analysis of potassium (17.98%), phosphorous (11.14%), calcium (3.07%), and magnesium (6.71%) was recorded for bacteria-inoculated alfalfa plants under drought stress. In conclusion, bacterial isolates AFFR02 and Mj1212 enhance alfalfa growth under drought stress. Therefore, the isolates could be used as potential candidates in smart-climate agricultural practices in drought-stricken areas worldwide.