In order to study effect of seed inoculation with Mycorrhiza strains on yield of fennel under drought stress conditions a factorial field experiment was carried out at the Research Station of Islamic Azad University, Tabriz Branch, Iran, during 2011-2012 on Fennel (Foeniculum vulgare Mill.) cv. Malayer. Studied factors were irrigation intervals (70mm, 100mm and 130mm evaporation from pan class A) and Mycorrhizae strains (Glomus interadics and G. mosseae). There was a field with non-inoculation with Mycorrhizae as control plot. Mean comparisons revealed that the lowest green cover percentage of fennel (0.13%) could be obtained from noninoculated seeds, but the highest one from those seeds inoculated with G. mosseae. Appearance of leaf senescence symptoms in fennel plants happened earlier when seeds were sown without inoculation. But appearance of these symptoms delayed nearly 5 days. Lower number of secondary branches (8.2 branches) observed in normally irrigated treatment (70mm evaporation from pan). Plants under sever water deficit produced higher seed yield than 100mm evaporation level. Seeds inoculated with G. interadics strain produced higher seed yield (75.25 g m-2) than non-inoculated seeds (55.04 g m-2). Essential oil percentage of fennel seeds only affected by mycorrhizal inoculation treatment, and those seeds inoculated with G. interadics was in a better condition. The stepwise regression analysis verified that the green cover percentage and secondary branches had a marked increasing effect (R2=0.71) on the seed yield of fennel. The present study concluded that seed inoculation with mycorrhizae strains can play a major role in improvement of seed yield in fennel under water deficit conditions.