The influence of a water deficit treatment and mycorrhizal inoculation with Pisolithus tinctorius (Pers.) Coker and Couch on the water relations, gas exchange, and plant growth in Arbutus unedo L. plants was studied in order to evaluate the hardening process during the nursery period. The ability to withstand the adverse conditions after transplantation was also studied. Mycorrhizal and non-mycorrhizal seedlings of A. unedo were pot-grown for 4 months in a greenhouse (nursery period), during which time two irrigation treatments, well watered (100% water holding capacity, leaching 20% of the applied water) and deficit irrigation (50% of the well watered), were applied. Subsequently, the plants were transplanted to the field and well irrigated (transplanting period), after which and until the end of the experiment they received no water (establishment period). At the end of the nursery period, both water deficit and mycorrhizae were seen to have altered the plant morphology. Mycorrhizal plants had lower leaf area and improved leaf color parameters, while the water deficit increased root dry weight and the root/shoot ratio. Mycorrhizal plants had higher leaf water potential values than non-inoculated plants. Mycorrhizae increased stomatal conductance and photosynthesis values, especially in stressed plants. Drought led to an osmotic adjustment and a decrease in the leaf water potential values at turgor loss point in the mycorrhizal plants. Cell wall rigidity, measured as increased bulk modulus of elasticity, was decreased by the mycorrhizae effect. After transplanting, no differences were found in the water relations or gas exchange values between treatments. During the establishment period, the plants that had been exposed to both drought and mycorrhizae showed a better water status (higher leaf water and turgor potential values) and higher gas exchange values. In conclusion, water deficit and mycorrhizal inoculation of A. unedo plants in nursery produced changes in tissue water relations, gas exchange, and growth, related with the acclimation process in the seedlings, which could provide better resistance to drought and stress conditions following planting.