Drought stress and inefficient resource utilization present considerable obstacles to cotton production. The utilization of Bacillus subtilis signifies a prospective remedy to these challenges. Nevertheless, the precise regulatory systems governing its effects have yet to be identified. This research examined the impact of Bacillus subtilis on cotton output under varying drought stress situations. The experiment utilized cotton as the subject, incorporating two application levels of Bacillus subtilis (0 kg/hm and 45 kg/hm) and two drought stress levels (H, indicating conventional irrigation at 350 mm; L, indicating 80% of conventional irrigation at 280 mm). Each treatment was duplicated thrice. The research assessed the impact of various treatments on dry matter accumulation, photosynthesis, root shape, microbial biomarkers, and root exudates. The findings indicated that the utilization of Bacillus subtilis mitigated the adverse effects of drought stress. In comparison to the control, cotton dry matter mass exhibited a growth of 4.38%-15.24%, the photosynthetic rate rose by 3.47%-11.94%, the transpiration rate augmented by 1.91%-7.53%, stomatal conductance enhanced by 4.54%-8.85%, and intercellular CO2 concentration elevated by 2.43%-4.32%. Moreover, enhancements in soil root morphology indicators resulted in an 8.94%-9.28% increase in cotton output. Structural equation modeling demonstrated that Bacillus subtilis modulates soil microbial populations, subsequently influencing biomarkers and root exudates. These factors collectively affect photosynthetic characteristics and root shape, improving stomatal conductance and elevating photosynthetic rates. This enhances dry matter buildup and optimizes root architecture, hence enabling the movement of water and nutrients. Consequently, cotton plants can amass greater photosynthetic products, resulting in enhanced dry matter accumulation and elevated yield. The findings suggest that Bacillus subtilis increases productivity during drought stress, offering insights for optimizing cotton production and enhancing yield in arid areas.