The present study was conducted to develop rusk from whole wheat flour (WWF) and water chestnut flour (WCF). WWF and WCF were evaluated for their nutritional composition and functional properties. Response surface methodology was used to optimize the levels of ingredients for the formulation of WCF incorporated rusk. The levels of ingredients were varied to determine their effect on responses (moisture, total ash, total phenol content [TPC], total flavonoid content [TFC], total antioxidant activity, taste, color, texture, flavor, and overall acceptability). Increase in WCF increased the moisture, total ash, TPC, TFC, total antioxidant activity, and mean sensory scores of taste and flavor of rusks. Rusks were developed on the basis of optimized conditions, that is, replacement with WCF as 46 g per 100 g of flour, fat content as 19.5 g per 100 g flour, and milk quantity as 113.3 ml per 100 g of flour. Developed rusks had better nutritional quality than control rusks. Physical characteristics of bread for developed rusks were found to be better than that of bread for control rusks. Hardness and fracturability of developed rusks were found to be more than the control rusks. WCF decreased the lightness and yellowness value, and improved the taste and flavor of developed rusks. Novelty impact statement Rusks are one of the most commonly consumed bakery products worldwide which are often developed from refined wheat flour which does not have any nutritional value. Water chestnut (WC) is undervalued crop which can be utilized to develop various food products. Water chestnut flour (WCF) is powerhouse of minerals and antioxidants. In this study, whole wheat flour and WCF are utilized to develop rusk rich in minerals and antioxidants with good sensory quality. Results indicate that WCF contains heat stable antioxidants which increased the antioxidant content of the rusks.