Water-deficit and drought has been caused environmental problems in recent years. One of the approaches to sustainable agriculture is using mycorrhizal symbiosis which reduces the impact of drought stress on growth and yield characteristics of plant. This study was conducted to examine the effect of arbuscular mycorrhizae symbiosis under drought stress on morphological characteristics and also, sugar and proline contents of blue panic grass. The treatments included microbial inoculation [control (NM), Glomus mosseae (GM), Glomus intraradices (GI) and both fungus inoculation (MI)], and drought stress (80% (S1), 50% (S2) and 20% (S3) of field capacity) which was carried out in factorial randomized design at 3 replications. Three months after growing plants, they were clipped from height of 30 cm from the soil surface and then drought stress was imposed for 15 weeks. Results showed that increasing drought stress led to significant reduction in plant height, chlorophyll content, stomatal conductance, shoot fresh and dry weight and colonization percentage of roots. Mycorrhizal symbiosis caused significant increase in all mentioned attributes. Drought stress caused to increase proline and soluble sugar concentration in leaves. Inoculation of arbuscular mycorhizae to growth medium significantly (P<0.05) increased proline and soluble sugar concentration of plant when grown under normal as well as in water-deficit environments indicating its importance in tolerance of blue panic grass.