Soil microbiota can confer fitness advantages to plants and increase crop resilience to drought and other abiotic stressors. However, there is little evidence on the mechanisms correlating a microbial trait with plant abiotic stress tolerance. Here, we report that Streptomyces effectively alleviate drought and salinity stress by producing spiroketal polyketide pteridic acid H (1) and its isomer F (2), both of which promote root growth in Arabidopsis at a concentration of 1.3 nM under abiotic stress. Transcriptomics profiles show increased expression of multiple stress responsive genes in Arabidopsis seedlings after pteridic acids treatment. We confirm in vivo a bifunctional biosynthetic gene cluster for pteridic acids and antimicrobial elaiophylin production. We propose it is mainly disseminated by vertical transmission and is geographically distributed in various environments. This discovery reveals a perspective for understanding plant-Streptomyces interactions and provides a promising approach for utilising beneficial Streptomyces and their secondary metabolites in agriculture to mitigate the detrimental effects of climate change.