The Earth's terrestrial carbon stocks have depleted an estimated 344 billion tons. Carbon losses amid water scarcity in climate-vulnerable drylands are a mounting challenge, and their restoration requires optimizing water-to-carbon biotransformation. Synthesizing thousands of worldwide experimental studies, we identify key biophysical pathways for enhancing carbon restoration and ecosystem resilience in global drylands, as follows: (i) Cropping diversification increases net primary productivity by 18.9% (n = 1296 studies); (ii) Regulated deficit irrigation cuts water use by 30-50% while improving yield-scaled water use efficiency by 3.4% (n = 9068 paired comparisons); (iii) Soil mulching increases land productivity by 22.2% (n = 48,144 paired comparisons); and (iv) Soil health rejuvenation strategies can sequester 1.2-3.8 t SOC ha(-)(1) yr(-)(1). Priorities to implement these biophysical pathways to enhance water-to-carbon biotransformation include: 'smart' irrigation, carbon dioxide fertilization-enhanced photosynthetic assimilation, rhizosphere engineering for microbiome-based nutrient solutions, biodegradable mulches replacing traditional polyethylene films, diversifying farming systems with low soil disturbance and climate-smart practices, and inclusive governance frameworks. These prioritized strategies reconcile water scarcity with carbon restoration to enhance dryland ecosystem resilience, which supports the UN's Sustainable Development Goals.