Through evolutionary time, the ever changing environmental conditions have been faced by plants among which water stress is the most common. Nevertheless, a great deal of variations in responses of plants to water deficit and their sensitivity to water scarcity has been noticed. For perception, signalling and response to water stress, plants are supposed to have programmed capability. Under the conditions of water scarcity, improved resistance to drought has been provided by AM fungi by enhancing efficiency of water absorption, uptake of mineral nutrients, especially phosphorus, accumulation of osmoprotectants like proline and sugars, activity of antioxidant enzymes like SOD, CAT and POD, production of isoprenoids, stomatal conductance, chlorophyll contents, photosynthesis and decline in ABA content. Expression of drought related plant genes like p5cs genes, aquaporin genes, as well as nced genes, brings about the physiological response of mycorrhizal plants to drought stress. Moreover, the efficacy of AM in reducing the use of phosphorus fertilisers and enhancement of soil stability increase the value of mycorrhizae for sustainability and ecosystem services. Their appropriate management has prospective to ameliorate the effectiveness and sustainability of drought tolerance.