Background: Stress is a known causative factor in modulating cognitive health, which overall well-being and quality of life are dependent on. Long-term stress has been shown to disrupt the balance of the hypothalamic–pituitary–adrenal (HPA) axis. Adaptogens, such as Withania somnifera (ashwagandha), are commonly used in Ayurvedic medicine for stress relief and ameliorating HPA-axis dysfunction. The aim of this study was to support the role of a root and leaf water-extracted ashwagandha extract (WS) in stress reduction by confirming the lowest clinically validated dose for stress management (125 mg/day) in a dose-dependent clinical study in adults with self-reported high stress. Methods: An 8-week, randomized, double-blinded, placebo-controlled study to compare the effects of three different WS extract doses (125, 250 and 500 mg) was performed. A total of 131 adults were enrolled, and 98 were included in the final analysis. Attenuation of chronic stress was measured using the 14-item Perceived Stress Scale (PSS) and biochemical-related stress parameters. Results: We have shown that aqueous WS extract (roots and leaves) safely reduces mild to moderate chronic stress at doses of 125 mg, 250 mg, and 500 mg/day for 8 weeks. Conclusions: Our findings demonstrate the stress-reduction capabilities of this well-characterized aqueous extract of WS (root and leaf) at the low dose of 125 mg/day, in a dose-dependent manner, via the modulation of the HPA axis. Trial registration: This study was registered with the Clinical Trials Registry—India (CTRI) with the registration number: CTRI/2019/11/022100.