We investigated biochar-induced drought tolerance in Leptocohloa fusca (Kallar grass) by exploring the plant defense system at physiological level. L. fusca plants were exposed to drought stress (100%, 70%, and 30% field capacity), and biochar (BC), as an organic soil amendment was applied in two concentrations (15 and 30 mg kg−1 soil) to induce drought tolerance. Our results demonstrated that drought restricted the growth of L. fusca by inhibiting shoot and root (fresh and dry) weight, total chlorophyll content and photosynthetic rate. Under drought stress, the uptake of essential nutrients was also limited due to lower water supply, which ultimately affected metabolites including amino and organic acids, and soluble sugars. In addition, drought stress induced oxidative stress, which is evidenced by the higher production of reactive oxygen species (ROS) including hydrogen peroxide (H2O2), superoxide ion (O2−), hydroxyl ion (OH−), and malondialdehyde (MDA). The current study revealed that stress-induced oxidative injury is not a linear path, since the excessive production of lipid peroxidation led to the accumulation of methylglyoxal (MG), a member of reactive carbonyl species (RCS), which ultimately caused cell injury. As a consequence of oxidative-stress induction, the ascorbate–glutathione (AsA–GSH) pathway, followed by a series of reactions, was activated by the plants to reduce ROS-induced oxidative damage. Furthermore, biochar considerably improved plant growth and development by mediating metabolites and soil physio-chemical status.