Drought stress hampers the growth and productivity of wheat crop worldwide. Thus far, different strategies have been proposed to improve drought tolerance in wheat but the combined application of plant growth-promoting rhizobacteria formulated bio-fertilizer (BF) and salicylic acid (SA) has not been thoroughly explored yet. Therefore, a pot experiment was conducted to observe the effect of SA, BF, and their combination on wheat plants under optimal and drought stress conditions. Seeds priming was done with BF (10 CFU mL). After 2 weeks of germination, SA (one mM) was applied as a foliar spray. Drought stress was applied by withholding water supply at three-leaf stage (30 d old plants) for the next 15 d until soil moisture dropped to 10%. Foliar application of SA increased the bacterial population of BF significantly compared to the sole application of BF under irrigated as well as drought stress conditions. Co-application of BF and foliar spray of SA induced drought tolerance in wheat plants by enhancing plant biomass, photosynthetic pigments, relative water content and osmolytes, and activities of the defense-related system. Plants treated with SA and BF together under drought stress had significantly increased leaf water status, Chl a, Chl b, and carotenoids synthesis by 238%, 125%, 167%, and 122%, respectively. Moreover, the co-application of SA and BF showed maximum SOD, POD, APX, and CAT activities by 165%, 85%, 156%, and 169% in the leaves while 153%, 86%, 116% and 200% in roots under drought stress. Similarly, the combined treatment exhibited a pronounced decrease in MDA content by 54% while increased production of proteins and proline by 145% and 149%, respectively. Our results showed that the co-application of SA and BF induced better drought tolerance as compared with the sole application of SA or BF. The results obtained herein suggest that combined application of BF and SA can be applied to the wheat crop to greatly improve drought tolerance in field conditions.