Fennel is an important medicinal plant with vast genetic resources and variation and low water requirement. Water is an important environmental factor with critical impact on growth, development and essential oils of medicinal plants. Iron (Fe) is an essential microelement for plants, whose deficiency may leave negative effects on growth and drymass and grain yield of crop plants. Iran is overwhelmed by an arid and semiarid climate and application of micro nutrients, in general and Fe in particular could help ameliorating the nutrients unavailability under these conditions. Though scientific data on the interactive effects of soil moisture and micronutrients such as Fe on medicinal plants is lacking. This study was aimed at studying the effects of water deficit on morpho-physiological attributes, grain yield and essential oil of 12 fennel genotypes (Urmia, Hamadan, Kerman, Shiraz, Birjand, Yazd, Ardabil, Avicenna, Kashan, Mashhad, Bushehr and Isfahan) and foliar application of Fe in lavark Research Farm, Isfahan University of Technology, Isfahan, Iran in a 3-replicate split split-plot randomized complete block field experiment. Two levels of irrigation (i.e. depletion of 35-45% and 75-85% of available soil water) where chosen as main plots, two Fe levels (i.e. and 4 mg kg -1 of FeSO 4 solution) as sub sub plots and the 12 genotypes as sub plots. Water deficit led to decreases in chlorophyll a (45%) and b (71%) and carotenoids (34%) cocentrations and increases in proline concentration and catalase and superoxide dismutase activities. Water deficit was detected to exert negative effects on grain yield components (i.e. umbels/plant, seeds/ umbel and 1000-seed weight) and as a result grain yield, due to decreases in the photosynthetic pigments and perhaps some other photosynthetic components of fennel genotypes. However, water deficit led to a 34% increase in the esseatial oil concentration of fennel seeds. It could be deduced that proline concentration and antioxidative enzymes activation were hired, by fennel, to achieve some degrees of osmoregulation and macromolecules protection from drought stress to help the medicinal plant to withstand drought with an improved level of essential oil. Foliar–applied Fe was found effective in increasing chlorophyll a (12%) and b (55%) and carotenoids (31%) and proline (7%) concentration and the activity of APX and SOD of fennel. Foliar-applied Fe helped improving the above physiological traits and the subsequent amelioration of, at least in part, drought-induced decreases in grain and dry matter yield of fennel. Foliar–applied Fe was found effective in increases (5%) in the seed essential oil concentration of fennel genotypes. Genotype ‘Urmia’ out–yielded the remaining genotypes under both control and water deficit conditions. Keywords: sweet fennel, micronutrients, Fe, drought.