Arbuscular mycorrhizal fungi (AMF) are widely considered as ecosystem engineers to positively affect the adaptation of plants to adverse environments, but whether AMF can commonly promote root-soil relationships and reproductive allocation is unclear in dryland crops. It is crucial to reveal if AMF can promote grain filling via mediating rhizosphere interactions regardless of soil water regimes and planting densities in dryland crops for the application of AMF regarding more precise management. To address this issue, Funneliformis mosseae was inoculated in pot-cultured wheat to examine the inoculation effects on wheat growth, yield formation, rhizospheric moisture and nutrient status across four planting densities under the drought and well-watered conditions. As expected, under drought stress, wheat grain filling, shoot biomass, rhizospheric soil water content (SWC), water use efficiency (WUE), soil organic carbon (SOC) content and the ratio of SOC to soil total nitrogen (TN) contents were significantly lowered in the soils without AMF inoculation across four planting densities. Under well-watered conditions, the SWC ranged from 10.30 % to 16.64 %, while under water stress conditions, the values ranged from 5.77 % to 9.61 %. Soil mineralized nitrogen (NO3−-N and NH4+-N) contents were decreased with AMF regardless of soil water status and planting densities. Under drought stress, AMF inoculation increased wheat productivity, WUE, SWC, SOC content, the ratio of SOC to TN, and promoted the absorption of mineralized nitrogen. Particularly, AMF inoculation substantially promoted the soil easily oxidizable organic carbon (EOC) content by 58.5 % and 55.6 % in the two highest densities, respectively. The soil microbial biomass carbon (MBC) content was totally >50 mg kg−1, whereas that of the non-AMF group was <40 mg kg−1. AMF inoculation significantly promoted grain yield up to 28.5 % under drought stress. Such a trend was tightly associated with higher WUE, rhizosphere C/N ratio and labile SOC (EOC and MBC) content owing to the enhanced absorption of soil mineralized nitrogen under drought stress with AMF. The above trend tended to become weaker with increasing densities. However, under a sufficient water supply, AMF inoculation had no such significant effect on the above parameters in low densities, and turned to generate negative effects under high densities (P < 0.05). For example, compared with well-watered, AMF inoculation reduced wheat grain yield and shoot weight by 9.78 % and 4.83 % in high planting density treatment (HC), respectively. Therefore, the inoculation effects of AMF were highly dependent on planting density and soil moisture, and the mechanism was that AMF optimized the rhizospheric interactions for better water and nutrient status under drought and low density. Our findings may provide novel insights into the application of AMF regarding agricultural sustainability under climate change.