Drought stress is a major abiotic constraint limiting crop productivity and ecosystem stability in arid and semi-arid regions. The use of stress-adapted plant growth-promoting rhizobacteria (PGPR) represents a sustainable strategy to enhance crop resilience while maintaining soil ecological function. This study characterized a desert-adapted, halotolerant Exiguobacterium sp. C-20, isolated from the rhizosphere of Panicum antidotale in the Cholistan Desert (Pakistan), for its plant growth-promoting traits and its ability to mitigate drought stress under controlled conditions. The strain exhibited strong phosphate-solubilizing activity, produced indole-3-acetic acid (IAA), and generated ammonia in vitro, confirming its functional potential as a PGPR. In greenhouse experiments, seed and soil inoculation of maize (Zea mays L.) hybrids (G-3 and G-7) exposed to drought (40% field capacity) significantly improved photosynthetic performance, stomatal conductance, chlorophyll stability (SPAD values), biomass accumulation, and tissue moisture content compared with non-inoculated controls. These improvements reflect enhanced plant physiological performance under water deficit rather than speculative mechanisms. Overall, the findings identify Exiguobacterium sp. C-20 as a promising microbial resource for developing eco-sustainable bioinoculants to improve drought tolerance and productivity in dryland agroecosystems.