Phyto-melatonin improves crop yield by mitigating the negative effects of abiotic stresses on plant growth. Numerous studies are currently being conducted to investigate the significant performance of melatonin in crops in regulating agricultural growth and productivity. However, a comprehensive review of the pivotal performance of phyto-melatonin in regulating plant morpho-physiological and biochemical activities under abiotic stresses needs to be clarified. This review focused on the research on morpho-physiological activities, plant growth regulation, redox status, and signal transduction in plants under abiotic stresses. Furthermore, it also highlighted the role of phyto-melatonin in plant defense systems and as biostimulants under abiotic stress conditions. The study revealed that phyto-melatonin enhances some leaf senescence proteins, and that protein further interacts with the plant’s photosynthesis activity, macromolecules, and changes in redox and response to abiotic stress. Our goal is to thoroughly evaluate phyto-melatonin performance under abiotic stress, which will help us better understand the mechanism by which phyto-melatonin regulates crop growth and yield.