The olive tree is an appropriate plant suited to the Mediterranean basin, where plants are often exposed to prolonged drought periods during the growing season. In this study we estimated the physiological, morphological, biochemical and anatomical effects of mycorrhizal inoculation and/or two irrigation levels of 100% and 50% of field capacity on one-year-old, own-rooted plants of olive cultivars, 'Koroneiki' (water deficit tolerant) and 'Manzanillo' (water deficit sensitive) to simulate water deficit conditions. Deficit irrigation levels significantly reduced arbuscular mycorrhizal (AM) inoculation. In both AM and nonAM, growth rate, trunk cross-sectional area, leaves area and total dry weights decreased with increasing deficit irrigation levels in both cultivars. The olive plants inoculated with the AM fungi had significantly greater growth indices in comparison to the non-inoculated ones. Increasing deficit irrigation level resulted in increasing the proline accumulation, while the chlorophyll content, catalase activity (CAT) and leaf total carbohydrates decreased. On the contrary, AM colonization significantly increased chlorophyll content, proline accumulation, total carbohydrates and CAT activity. A reduction in leaf water potential (psi) was evident with increasing water deficit level from 100 to 50%. However, the plants inoculated with the AM fungi exhibited greater leaf water potential (-1.0 MPa) in comparison with the non-inoculated plants (-1.3 MPa). Water deficit exhibited an increase in the stomatal and trichome densities while stomatal dimensions (length and width) and trichome diameter decrease in both cultivars. Stomatal density in 'Koroneiki' leaves increased by 21.25% (vs. 14.54% for 'Manzanillo' leaves) during deficit irrigation. Moreover, 'Koroneiki' cultivar exhibited a higher increase in trichome density than 'Manzanillo' cultivar. There was no noticeable effect of mycorrhizal inoculation on leaf anatomy.