<p>Drought is a significant abiotic stressor that reduces peanut production because it alters photosynthetic activity and impacts crop growth. Therefore, developing drought-tolerant peanut genotypes capable of maintaining higher photosynthetic rates (<i>A</i>) under stress is crucial. This study assessed changes in photosynthetic and chlorophyll fluorescence responses to light (photosynthetic photon flux density, PPFD) in newly bred drought-tolerant peanut genotypes. Ten genotypes [NM-3, NM-5, NM-6, NM-23, NM-69, NM-70, NM-74, NM-77, V-C, and C-76–16] were evaluated under full irrigation (FC₁₀₀) and deficit irrigation (FC₅₀) in a split-plot design with four replications in a greenhouse. Under high PPFD levels, genotype NM-5 with deficit irrigation exhibited significantly higher <i>A</i>, stomatal conductance (<i>gs</i>), quantum efficiency of photosystem II (ΦPSII), and electron transport rate (ETR) by 40–59%, 135–525%, 31–212%, and 31–102%, respectively, than check varieties (V-C and C-76–16) and other genotypes. The NM-74 and NM-77 genotypes also performed well under deficit irrigations but with slightly lower <i>A</i>, <i>gs</i>, ΦPSII, and ETR. Genotypes NM-5, NM-23, NM-74, and NM-77 exhibited significantly higher quantum efficiency of photosystem II (Fv’/Fm’) and photochemical quenching (qP) with higher light intensities in the daily cycle under deficit irrigation. The decline in ETR at the same PPFD levels in NM-3, NM 69, NM-70, and C-76–16 indicated photoinhibition or saturation of the photosynthetic apparatus compared to other genotypes. Concurrently, FC₁₀₀ irrigation level minimizes photoinhibition, enhancing <i>A</i>, <i>gs</i>, ΦPSII, and ETR in the genotypes than FC₅₀. Therefore, we conclude that NM-5, NM-74, and NM-77 genotypes can perform better under water deficit environments. As such, chlorophyll fluorescence parameters Fv’/Fm’ and qP can be considered for selective breeding to enhance photosynthetic efficiencies.</p>