Research indicates arbuscular mycorrhizal fungi (AMF) inoculum potential and AMF biomass production in agricultural soil are strongly influenced by both soil moisture availability and crop rotation (CR) strategies. We hypothesized that AMF biomass production in and inoculum potential of Wyoming semiarid agricultural soil would increase when managed using CR and irrigation. To test this hypothesis, we examined AMF activity (AMF biomarker fatty acid, and AMF infection of roots) in two differently managed soils (no-CR soil and two-year CR soil) in a field experiment. Furthermore, in a greenhouse experiment, we examined AMF activity in the same two CR treatment soils under different irrigation regimes (wet, irrigated to 60% field capacity, and dry, irrigated to 15% field capacity). Notably, the two-year CR soil had greater amounts of AMF biomarker fatty acid and greater inoculum potential, and higher percentage of AMF root colonization compared to no-CR soil. Despite the fact that the CR soil had more AMF propagules, it was less than the undisturbed non-agricultural native sage-grassland soils previously reported. Overall, the findings suggest that high levels of irrigation can inhibit the activity of AMF adapted to semiarid soil conditions and CR can increase activity of AMF in soils from semiarid regions.