The use of nano particles (NPs) in agriculture is growing dramatically. However, the impact of Fe-NPs on physiological parameters and essential oil yield of lemon balm (Melissa officinalis L.) are still unknown. This research was conducted to address the effect of NPs of Fe oxide (Fe-NPs; 0, 5, 10, 20, 30 and 20 mu M) on resistance against reduced irrigation by 80, 60 and 40 % Field Capacity (FC), in Melissa officinalis. Intensified drought, while significantly enhancing malondialdehyde (MDA), H2O2, proline conten, electrolyte leakage, total antioxidant activity (TAA), total phenolic content (TPC), antioxidant power and enzyme activities of lemon balm, caused marked reduction in chlorophyll content, ratio of variable to maximum fluorescence (Fv/Fm) and relative water content. The essential oil yield of Melissa officinalis increased with the decrease in irrigation from 80 to 60 % FC, and decreased with the water deficit increase to 40 % FC. Treating lemon balm plants with all levels of Fe NPs further increased the essential oil yield and improved physiological attributes of lemon balm. Fe NPs also resulted in alleviating oxidative stress by reducing TAA, TPC and antioxidant enzymes activities. The compensatory effect of Fe nanoparticle treatments in aleviating the negative effect of reduced irrigation was due to increase of proline accumulation and reduction of some antioxidant activities which increased drought tolerance of lemon balm. Reduced irrigation regimes as well as Fe NPs showed strong effects on essential oil production and composition in lemon balm.