The present study evaluated the soil-moisture deficit stress tolerance of AtDREB1A transgenic peanut lines during reproductive stages using lysimetric system under controlled glasshouse conditions. The antioxidant activities of AtDREB1A transgenic lines were measured by biochemical assays. The transgenic peanut lines recorded significantly lower accumulation of malondialdehyde and hydrogen peroxide than the wild-type. Whereas, specific activity of catalase, guaiacol peroxidase, ascorbate peroxidase, glutathione reductase and ascorbic acid were found to be significantly higher in transgenic lines than in the wild-type line under drought stress. The results showed that the transgenic lines expressed lower oxidative damage than wild-type and could protect themselves from the elevated levels of reactive oxygen species under drought stress. This could be attributed to the regulation of various stress-inducible genes by AtDREB1A transcription factor. Improved photosynthetic and growth parameters were also recorded in transgenic lines over wild-type under drought stress. Improved physio-biochemical mechanisms in transgenic peanut lines might have resulted in improved growth-related traits as significant correlations were observed between physio-biochemical parameters and growth-related traits under drought stress. The potential target genes of AtDREB1A transcription factor in transgenic peanut lines during drought stress were identified, which helped in understanding the molecular mechanisms of DREB-regulated stress responses. The transgenic line D6 reported the best physio-biochemical mechanisms and growth-related parameters under drought stress over other transgenic lines and wild-type, suggesting it may be used to develop high yielding and terminal drought-tolerant peanut varieties.