A field experiment was carried out to evaluate the effectiveness of mycorrhizal inoculation with three arbuscular mycorrhizal (AM) fungi (Glomus intraradices Schenck & Smith, Glomus deserticola (Trappe, Bloss. & Menge), and Glomus mosseae (Nicol & Gerd.) Gerd. & Trappe) and the addition of composted sewage sludge (SS) with respect to the establishment of Retama sphaerocarpa L. seedlings, in a semiarid Mediterranean area. Associated changes in soil chemical (nutrient content and labile carbon fractions), biochemical (enzyme activities), and physical (aggregate stability) parameters were observed. Six months after planting, both the addition of composted SS and the mycorrhizal-inoculation treatments had increased total N content, available-P content, and aggregate stability of the soil. Values of water-soluble C and water-soluble carbohydrates were increased only in the mycorrhizal-inoculation treatments. Rhizosphere soil from the mycorrhizal-inoculation treatments had significantly higher enzyme activities (dehydrogenase, protease-BAA, acid phosphatase, and P-glucosidase) than the control soil. In the short-term, mycorrhizal inoculation with AM fungi was the most effective treatment for enhancement of shoot biomass, particularly with G. mosseae (about 146% higher with respect to control plants). The addition of the composted SS alone was sufficient to restore soil structural stability but was not effective with respect to improving the performance of R. sphaerocarpa plants.