Sugarcane is an important crop globally as it is a primary source of sugar and is used in the production of a wide range of products such as food, biofuels, and renewable materials. In Iran, sugarcane is significant as it contributes to the country's sugar production and supports its agricultural industry, providing employment and economic value to the region. In this study, the physiological changes of sugarcane plants under drought stress were investigated. After callus formation and transfer of the plants to a shoot culture medium, drought stress was applied at four levels: control, 0.4, 0.8, and 1.2 mM/L of polyethylene glycol in the MS culture medium. Changes in morphological characteristics, as well as biochemical properties including pigments, antioxidant enzyme activity, and non-enzymatic antioxidants of sugarcane plants under drought stress, were measured. Drought stress led to a decrease of about 34% in growth parameters and phenolic content increased by 1.43 times of sugarcane plants, proportional to the concentration of polyethylene glycol in the culture medium, while osmolytes and antioxidant enzymes such as catalase, superoxide dismutase, peroxidase, ascorbate peroxidase, glutathione reductase, and glutathione peroxidase, showed higher levels, indicating that one of their roles in sugarcane is responding to drought stress and neutralization of reactive oxygen species. These insights can inform the creation of drought-resistant crop varieties, supporting sustainable agriculture in regions prone to water scarcity. Moreover, they could pave the way for advancements in water conservation practices and help mitigate the impact of climate change on farming.