A field experiment was conducted during kharif seasons of 2017 and 2018 to study the influence of intercropping under different levels of irrigation on the performance and nutrient dynamics of groundnut. Groundnut intercropped with blackgram resulted higher in number of matured pods per plant (9.04), a shelling per cent of 70.1 and sound matured kernel of 92.9% with an estimated yield of 11.3 g/plant over 7.6% over the sole crop of groundnut. Irrigation scheduling with IW/CPE ratio of 0.75 increased the matured pods per plant which eventually increased the estimated yield to 9.72 g/plant. Higher nutrient uptake by the crop was compensated when groundnut was intercropped with legume crop blackgram. Soil bacteria (58.3×106 CFU/g), fungi (22.7×103 CFU/g) and actinomycetes (14.5×104 CFU/g) were recorded under groundnut+blackgram intercropping system. Soil biological properties increased with increased irrigation supplied to the crop but the same could not increase the performance of the crop. From the study, groundnut+blackgram intercropping system with irrigation scheduling at IW/CPE ratio of 0.75 enhanced the productivity, with lesser nutrient draining as compared with the nutrient uptake maintaining the long term soil productivity.