Sweet sorghum, a high-quality forage and energy crop, is significantly affected by drought, the primary abiotic stress impacting its growth. Melatonin (MT) has emerged as a crucial signaling molecule in plant responses to abiotic stress. This study investigates the role of melatonin in enhancing drought tolerance in sweet sorghum, specifically using the ‘Dali Shi’ variety under polyethylene glycol (PEG)-induced drought conditions. Our findings demonstrate that exogenous melatonin application significantly increased proline content (by 27.76% and 5.95% under mild and moderate drought, respectively) while decreasing malondialdehyde (MDA) levels (by 18.33% and 35.18%, respectively). Melatonin also enhanced the accumulation of photosynthetic pigments, including chlorophyll b and total chlorophyll, and improved photosynthetic fluorescence parameters (Fv/Fm and ETR). Additionally, melatonin treatment improved root vitality, stimulated carbon and nitrogen metabolism, and increased antioxidant enzyme activity. Transcriptomic analysis revealed that differentially expressed genes were enriched in pathways related to carbon fixation, glycolysis/gluconeogenesis, nitrogen metabolism, antioxidant defense, and plant hormone signaling. Notably, melatonin upregulated key genes associated with these pathways and activated bHLH and MYB transcription factors. In conclusion, this study elucidates the mechanisms by which melatonin enhances sweet sorghum’s drought tolerance, highlighting its potential as a practical approach for improving drought resistance in this crop.