The rangeland grass, Bouteloua gracilis was inoculated with its mycorrhizal symbiont, Glomus fasciculatus, to determine the influence of vesicular-arbuscular mycorrhizae on water status, stomatal behaviour and photosynthesis as well as gross plant morphology, biomass and phosphorus content. Mycorrhizal infection increased transpiration rates by over 100% with 50 to 70% lower leaf resistances to water vapour diffusion. Leaf xylem pressure was not different between mycorrhizal and non-mycorrhizal plants indicating that whole-plant resistance to water transport was reduced by more than 50%. Photosynthetic rates under saturating light conditions increased 68% with infection as a consequence of a 33% reduction in stomatal resistance and a 67% reduction in mesophyll resistance to CO2 uptake. Mycorrhizal infection did not affect biomass or gross plant morphology after 30 weeks of growth, but increased chlorophyll and phosphate concentrations by 28% and 70% respectively. These physiological changes indicate that mycorrhizae may substantially alter survival ability of Bouteloua gracilis.