Climate change can intensify drought in many regions of the world and lead to more frequent drought events or altered cycles of soil water status. Therefore, it is important to enhance the tolerance to drought and thus health, vigor, and success of transplantation seedlings used in the forestry by modifying fertilization and promoting mycorrhization. Here, we sowed seeds of Japanese larch (Larix kaempferi) in 0.2-L containers with 0.5 g (low fertilization; LF) or 2 g (high fertilization; HF) of slow-release fertilizer early in the growing season. One month later, we irrigated seedlings with non-sterilized ectomycorrhizal inoculum (ECM) or sterilized solution (non-ECM), and after about 2 months, plants were either kept well watered (WW; 500 mL water/plant/week) or subjected to drought (DR; 50 mL water per plant/week) until the end of the growing season. HF largely stimulated plant growth and above- and belowground biomass production, effects that are of practical significance, but caused a small decrease in stomatal conductance (Gs390) and transpiration rate (E390), which in practice is insignificant. ECM treatment resulted in moderate inhibition of seedling growth and biomass and largely canceled out the enhancement of biomass and foliar K content by HF. DR caused a large decrease in CO2 assimilation, and enhanced stomatal closure and induced senescence. DR also largely depleted foliar Mg and enriched foliar K. Although DR caused a large decrease in foliar P content in LF, it moderately increased P in HF. Likewise, DR increased foliar K in HF but not in LF, and decreased foliar P in ECM plants but not in non-ECM plants. Conversely, ECM plants exhibited a large enrichment in foliar P under WW and had a lower water potential under DR when grown in LF. These results indicate that the drought tolerance and health and vigor of Japanese larch seedlings can be modified by soil fertility and soil microorganisms. This study provides a basis for new multifactorial research programs aimed at producing seedlings of superior quality for forestation under climate change.