Agricultural production in dryland ecosystems is constrained by low soil fertility, erratic rainfall, and limited water availability. To address these challenges, the integration of Trichoderma harzianum with organic mulch was investigated as an eco-friendly strategy. The effects of T. harzianum and organic mulch on Rubaru local shallots (Allium cepa var. Aggregatum) cultivated in Sumenep, Indonesia, were evaluated. A factorial randomized block design with four replications was applied, consisting of two mulch types (bamboo litter and corn plant litter) and four T. harzianum dosages (0, 10, 20, and 30 g/plant). Significant improvements in plant height, leaf number, shoot formation, bulb number, bulb weight, and total yield were recorded under T. harzianum treatments, with the best response obtained at 30 g/plant. Productivity was further enhanced by bamboo litter mulch compared to corn plant litter mulch. In addition, increasing doses of T. harzianum were associated with a reduction in downy mildew (Peronospora) incidence across observation periods, with the greatest reduction (45,4%) observed at 30 g/plant at 6 weeks after planting. By Principal Component Analysis (PCA), 82.5% of total variation was explained, with growth and yield traits found to be positively correlated and negatively associated with disease incidence. This study confirmed that integrating T. harzianum with organic mulch is an effective, environmentally friendly strategy to enhance productivity, reduce disease incidence, and improve input efficiency in shallot cultivation under dryland conditions.