In the context of increasing water scarcity and environmental pollution, this study investigates the synthesis and application of p(AA-Oco-AAm)-g-Citrus Sinensis Peel hydrogel (CSP hydrogel) to enhance soil water retention and remove organic dyes from wastewater. Hydrogels were prepared using a combination of acrylamide and acrylic acid, with the incorporation of citrus peel as a natural resource. The water absorption capacity of the hydrogels was evaluated, achieving a maximum retention rate of 477 g/g, significantly improving the water-holding ability of various soil types. Additionally, the hydrogels demonstrated a strong affinity for methylene blue, with an equilibrium adsorption capacity reaching 2299.45 mg/g, indicating their effectiveness in wastewater treatment. Kinetic and isothermal adsorption models were applied to analyze the adsorption dynamics, revealing a superior fit to the Langmuir model. The hydrogels maintained structural integrity and reusability over multiple cycles, underscoring their potential for sustainable agricultural practices and environmental remediation. This research highlights the dual benefits of utilizing agricultural waste for the development of eco-friendly materials while addressing critical challenges in water management and pollution control.