This article examines the relationship between Aurangzeb’s Deccan campaign (1681-1707) and the decline of the Mughal Empire in order to explain its transformation from territorial expansion to structural crisis. A structural-systemic approach, integrating the theory of Imperial Overstretch with historical and logical analysis are adopted to assess the campaign’s impact on the Mughal state’s military, fiscal, and administrative capacities. The findings demonstrate that the Deccan campaign was initially intended to address the Jagirdari Crisis; however, its prolonged duration substantially increased military expenditure, weakened fiscal capacity, intensified administrative and governance problems, and ultimately exceeded the empire’s ability to mobilize and manage resources. The article argues that the decline of the Mughal Empire cannot be explained by a single factor but rather resulted from the interaction of military, fiscal, administrative, and political pressures generated by territorial expansion. By highlighting this causal mechanism, the study contributes to the application of Imperial Overstretch as an analytical framework for understanding the decline of early modern empires.