A field experiment was conducted at the Agricultural College and Research Institute, Madurai, Tamil Nadu during rabi 2023 and kharif 2024 to study the effect of establishment methods and nutrient management on soil microbial population, enzyme activity and yield of basmati rice (Oryza sativa L.). The experiment was laid out in a split-plot design with three establishment methods in the main plot: mechanical transplanting (M1), transplanting under saturated soil conditions (M2) and conventional transplanting (M3) and seven nutrient management practices in the subplot: ICAR blanket recommendation for basmati (S1), Soil Test Crop Response (STCR) recommendation (S2), 75 % inorganic + 25 % organic N equivalent (S3), 50 % inorganic + 50 % organic N equivalent (S4), 25 % inorganic + 75 % organic N equivalent (S5), 100 % organic N equivalent (S6) and absolute control (S7). Results revealed that M1S6 (mechanical transplanting with 100 % organic as N equivalent) recorded the higher microbial count and enzyme activity. In terms of yield, mechanical transplanting with STCR based nutrient management (M1S2) produced the highest yield, followed closely by M1S3 (mechanical transplanting with application of 75 % inorganic + 25 % organic as N equivalent), which was statistically on par with M1S2. In conclusion, although M1S2 achieved the highest yield, M1S6 emerged as the most effective for enhancing microbial population and enzyme activity, thereby promoting soil health. M1S3 offered a balanced trade-off by achieving high yield while integrating organic nutrients, emphasizing environmental sustainability and soil health. Hence, M1S3 is recommended as a practical and eco-friendly option for sustainable basmati rice cultivation, providing harmonious balance between productivity and ecological wellbeing.