Organic hydromulches (liquid spray-on mulches) have been used traditionally in land rehabilitation, mainly to mitigate post-fire runoff and erosion. However, in recent years, a new application of these materials as an eco-friendly alternative to the widely used polyethylene mulch, both in vegetable and woody crops, has been studyied. This work analyzes the effects of six hydromulches, based on organic by-products, on different soil parameters (water content, temperature, and CO2 flux), plant–water relations (stem water potential, leaf gas exchange, and leaf temperature), and the growth (trunk diameter) of young olive trees planted in large pots in the open field over a 2-year trial. The hydromulches tested were: rice husk (RH), rice husk with linen oil (RHL), mushroom substrate (MS), wheat straw (WS), pistachio (PW), and vineyard (VW) pruning wood chips, mixed with different additives (gypsum, recycled paper paste, and Kraft fiber). A non-mulched manual weeding control (NM) was included. The results indicated that hydromulches, in comparison with NM, resulted in increased volumetric soil water content (on average, 22.9% in hydromulches and 19.5% in NM), reduced soil temperature fluctuations (4.97 °C in hydromulches and 6.13 °C in NM), and increased soil CO2 fluxes (0.80 and 0.49 g CO2 m−2 h−1, respectively). Although the differences in the soil water content did not have an obvious effect on the plant–water status, crop growth was reduced in NM (≈23% lower than PW, MS, RHL, and WS), suggesting that vegetative growth, especially in young olive trees, is extremely sensitive to water deficit. The overall study leads to considering hydromulches as a good alternative to mulching in large pots, especially PW, which would be useful for nursery crops before their final establishment in the field.