The present investigation was conducted during 2014 and 2015 growing seasons in order to study the effects different drought stress levels in particular; 100%, 50% and 25% of the soil field capacity (FC) as well as the effects of arbuscular mycorrhizal (AM) inoculation on morphological and physiological performance and drought resistance of pomegranate seedlings. Drought stress decreased arbuscular mycorrhizal (AM) colonization. In both the AM and non AM, growth rate, leaf area, trunk cross sectional area and total dry weight decreased with increasing drought stress levels. AM colonization significantly stimulated plant growth indices and biomass production regardless of water status. Increasing drought stress levels tended to increase the proline accumulation, while the chlorophyll content, leaf total carbohydrates, and catalase activity (CAT) decreased. By contrast, AM colonization increased chlorophyll content, proline, total carbohydrates and CAT activity. A gradual decrease in leaf water potential (Ψ) and relative water content was evident with increasing drought stress levels. However, the seedlings inoculated with AM fungus had significantly higher leaf water potential (- 1.5MPa) compared to the non-inoculated seedlings (- 2.0MPa).