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The highly conserved plant microRNA156, miR156, affects various aspects of plant development and stress response by silencing SQUAMOSA-PROMOTER BINDING PROTEIN-LIKE (SPL) transcription factors. Our understanding of the role of miR156 and its mode of action in alfalfa’s (Medicago sativa L.) response to drought and flooding is still elusive, and thus this study was aimed at filling this gap in knowledge. Physiological parameters, metabolite and transcriptional analyses showed an interplay between miR156/SPL13 and WD40-1/DFR to mitigate drought stress. Low to moderate levels of miR156 overexpression suppressed SPL13 and increased WD40-1 to fine-tune the DIHYDROFLAVONOL-4-REDUCTASE (DFR) level for enhanced anthocyanin biosynthesis. Moreover, RNAseq-derived weighted gene co-expression network analysis (WGCNA) of SPL13RNAi alfalfa plants showed tissue-and genotype-specific drought responses. Accordingly, transcripts mediating stress-mitigating metabolites, such as anthocyanin, were increased in stem tissues of drought-stressed plants, while those involved in photosynthesis were maintained in leaves. Moreover, drought-stressed roots showed elevated transcripts associated with metal ion transport, carbohydrate, and primary metabolism. The role of miR156 in flooding tolerance was also investigated using flooding-tolerant (AAC-Trueman) and -sensitive (AC-Caribou) alfalfa cultivars, along with miR156OE and SPL13RNAi plants. Additionally, to examine the role of ABA and SnRK1 in regulating miR156 expression, ABA insensitive (abi1-2, abi5-8) Arabidopsis thaliana mutants and transgenic lines with either overexpressed (KIN10-OX1, KIN10-OX2) or silenced (KIN10RNAi-1, KIN10RNAi-2) SnRK1 were used. Investigation of physiological parameters, hormone profiling, and global transcriptomics showed a positive role for miR156 in flooding tolerance, and a comparison of Arabidopsis mutants and transgenic lines showed that miR156 expression was affected by SnRK1 to enhance anthocyanin and ABA metabolites. Transcriptomics analysis also revealed nine new alfalfa SPLs, three of which responded to flooding (SPL7a, SPL8, and SPL13a) along with the previously identified SPL4, SPL9, and SPL13. Characterization of the newly identified SPLs, along with understanding the mode of action of miR156 in alfalfa’s response to drought and flooding, will provide useful tools in marker-assisted breeding of alfalfa and resource to scientific knowledge.