Soil cadmium (Cd) causes toxicity and oxidative stress, alters biochemical processes and rootknot formation in rice. Irrigation of exogenous peroxidase (POX) together with its co-substrate H2O2 (POXRice + H2O2), is likely to have protective effect upon the biochemical and nodular changes in rice grown in Cd-rich soil. Exposure to Cd concentration of 1.00 mg/L increased oxidative stress, loss of cell viability, electrolyte leakage and root knot formation, whereas it significantly lowered the chlorophyll level and rhizobium growth in rice. Irrigation of exogenous POXRice + H2O2 to Cd-stressed rice seedlings reversed the Cd-induced alterations in rice to levels similar in control (non-stressed) seedlings. Results provided strong evidence of exogenous POXRice + H2O2-mediated reversal and restoration of physiological and biochemical processes as well as increased resistance of rice seedlings to root knot formation. Irrigation with POXRice + H2O2 appeared to contribute towards bringing normoxic conditions in the otherwise hypoxic soil environment by enhancing the O2 in pot-experiments due to reduced Cd uptake, enhanced mineral homeostasis of essential elements viz. P, Fe, Mo, Mg and Mn for maintenance of root architecture damaged by lipid peroxidation and reduction in oxidative stress by reducing Cd-induced reactive oxygen species generation. Therefore, the mitigation of Cd-toxicity in rice through this novel approach appeared to be a promising mode to limit Cd-uptake, modulate protective and tolerance mechanisms for sustainable rice yield in Cd-contaminated rice-croplands and prevent nematode attack in rice, however, more detailed studies are needed prior to large scale applications.