Drought is one of the most devastating abiotic stresses worldwide, threatening global agricultural productivity. As a critical species for ecological restoration of degraded grasslands in arid regions, Agropyron mongolicum requires enhanced drought tolerance to ensure successful revegetation under water-limited conditions. In this context, melatonin has emerged as a pleiotropic regulatory molecule that orchestrates complex regulatory networks to enhance plant drought tolerance. Here, we integrated physiological and transcriptomic analyses to elucidate how melatonin alleviates drought stress in A. mongolicum by regulating carbon and nitrogen metabolism in both leaves and roots, thereby enhancing drought tolerance. Our results showed that drought stress significantly inhibited A. mongolicum seedling growth, while exogenous melatonin application alleviated these effects by increasing biomass accumulation, reducing lipid peroxidation, enhancing antioxidant enzyme activity, and promoting endogenous melatonin and osmolyte accumulation. RNA-Seq analysis indicated melatonin-responsive genes were significantly enriched in carbon and nitrogen metabolic pathways under drought conditions. Comprehensive analysis of transcriptomic, enzymatic, and metabolite data further demonstrated that melatonin treatment maintained a more active and balanced carbon and nitrogen metabolic homeostasis, particularly evident in enhanced sucrose biosynthesis and improved nitrogen assimilation efficiency under drought stress. Overall, our findings elucidate the mechanistic basis by which melatonin coordinates carbon and nitrogen metabolic networks to enhance drought tolerance in A. mongolicum, providing valuable insights for harnessing melatonin as a sustainable strategy to improve plant drought resistance.