Agricultural sustainability in Bihar is strongly constrained by erratic monsoon rainfall, seasonal water scarcity, declining groundwater levels in localized pockets, and increasing production risks under smallholder-dominated farming systems. Rainwater harvesting (RWH) has been promoted as a decentralized, low-cost strategy to enhance water availability and improve resilience, yet empirical evidence from the region remains limited. This study evaluates the role of rainwater harvesting in strengthening agricultural sustainability across contrasting agro-hydrological settings in Bihar. A mixed-methods cross-sectional approach was adopted, combining household surveys (n = 120), on-farm hydrological measurements, crop performance monitoring, and key informant interviews. Comparative analysis between farms with and without rainwater harvesting structures assessed impacts on irrigation frequency, groundwater response, crop yields, economic returns, and farmer perceptions. Results indicate that adoption of rainwater harvesting reduced seasonal irrigation dependence, supported localized groundwater recharge, and significantly enhanced yields in rice–vegetable systems through timely supplemental irrigation. Economic assessment revealed favorable benefit–cost relationships, particularly where harvested rainfall enabled diversification into high-value horticultural crops. Farmer perceptions emphasized improved water security and reduced crop failure risk as major advantages, while high initial investment, land constraints, and limited technical support emerged as key barriers to wider adoption. Overall, the findings demonstrate that rainwater harvesting contributes to agricultural sustainability in Bihar through improved water security, livelihood stability, and resilience to intra-seasonal dry spells. However, scaling up requires integrated policy support, capacity building, and community-oriented approaches to ensure equitable and long-term benefits.