Application of nutrients as nanoparticle (NP) is an operative manner of nutrient supply for plants, especially under stress conditions. The present study was designed to highlight the role of iron NP on drought tolerance and elucidate the underlying mechanisms in drought-stressed canola plants. Drought stress was imposed by polyethylene glycol different concentrations (0, 10 and 15% (W/V)) with or without iron NP (1.5 and 3 mg/l). A comparative study of several physiological and biochemical parameters have been carried out in canola plants treated by drought and iron NP. Stressed-canola plants showed a reduction in growth parameters, whereas iron NP mostly stimulated growth of stressed plants, which was accompanied by reinforcement in defense mechanisms. Regarding impacts on compatible osmolytes, the data revealed that iron NP was able to regulate osmotic potential by increasing protein, proline and soluble sugar contents. The iron NP application was activated the enzymatic defense system (catalase and polyphenol oxidase) and promoted the non-enzymatic antioxidants (phenol, flavonol and flavonoid). Both of these adaptive responses declined free radicals as well as lipid peroxidation and enhanced the membrane stability and drought tolerance of the plants. Enhanced chlorophyll accumulation via induction of protoporphyrin, magnesium protoporphyrin and protochlorophyllide, by iron NP also contributed towards better stress tolerance. Enzymes of Krebs cycle, namely succinate dehydrogenase and aconitase, were induced by iron NP in canola plants grown under drought stress. These results propose a multifaceted involvement of iron NP, through regulation of activity of respiratory enzymes and antioxidant enzymes, production of reactive oxygen species, osmoregulation and secondary metabolites metabolism, in response to drought stress.