Hydrogel polymers have been used to enhance water and nutrient retention in agricultural soils. The incorporation of nanoparticles to yield composite hydrogels has also gained substantial momentum over the years. The aim of the research was to investigate the effect of hydrogel-nano natural char composite (reinforced starch-based hydrogels with natural char nanoparticles) at three levels 0%, 0.3% and 0.6% (w/w) on nutritional and morphological responses of tomato plant (Lycopersicon esculentum Mill.) as well as on some soil biological properties under water-deficit stress at three levels 50% water-holding capacity (WHC) (severe stress), 75% WHC (mild stress), and 85% WHC (non-stress conditions). The different levels of nano-composite and water deficit stress significantly (P < 0.05) affected plant morpho-nutritional indices and soil microbial traits. Water-deficit stress decreased all measured parameters in this assay. However, the use of nanocomposite reduced the negative effects of water-deficit stress on tomato growth and development. The magnitude of the responses to the nanocomposite treatment depended on the concentration of applied nanocomposite and stress severity with the most positive effects on the growth (22-45% increase) and nutritional indices (P, Fe, and Zn concentration) (16-29% increase) of tomato at level 0.3% hydrogel nanocomposite and 85% WHC and on soil respiration rate (61% increase) and microbial population size ( 89% increase) at the level 0.6% hydrogel nanocomposite and 75% WHC. Accordingly, it is suggested that the application of hydrogel-nano natural char composite as a promising soil amendment, if used correctly, can be a successful method to maintain soil moisture content (improved tomato growth), plant nutrients, and soil microbial activity in the tomato growing medium.