Soil structure can directly and indirectly affect several soil physical properties including water retention, hydraulic conductivity, aeration and soil temperature. Drought stress is a widespread environmental stre therefore, it is vital to find effective strategies for increasing plant tolerance to draught stress. Inoclulation of plants root’s with beneficial soil microorganisms can be used to diminish water stress effect and to improve soil structure. This study was conducted to investigate the symbiotic effect of endophytic fungus, Piriformospora indica , with wheat and maize on soil structural stability indices, and and physical and chemical properties. The experiment was done in a factorial arrangment of treatments with completely randomized design and three replicates in Research Greenhouse of College of Agriculture, Isfahan University of Technology. Experimental treatments included three levels of the fungus treatment (inoculated with root, non-inoculated root, addiing fungus extract to the soil), three levels of drought stress (95, 80 and 65 percents of soil field capacity, FC) and two crops (wheat and maize). Selected soil physical, chemical and biological properties including organic carbon content, water repellency, water-dispersible clay, basal microbial respiration, hot-water soluble carbohydrates and soil water characteristic curve were determined in order to assess soil structural stability and soil quality in different treatments. Moreover, plant growth characteristics and water status were measured. Generally, the highest stem heights were observed in the lowest drough stress level (i.e., 0.95FC). The main effect of fungus treatment on leaf water potential was significant; adding fungus extract to the soil was the best in terms of plant water status (water potential) when compared to other fungus treatments. There was no significant difference in organic carbon contents of rhizosphere of P. indica inoculated and non-inoculated plants, however, the fungus extract addition significantly decreased the soil organic carbon. The main effect of drought stress levels on soil dispersible clay indicated significant difference between 0.95FC or 0.80FC and 0.65FC treatments. With an increase in the drought stress (i.e., lowering soil water content), soil dispersible clay content decreased. Soil basal microbial respiration decreased with an increment in drought stress. Addition of fungus extract to the soil (Ex) resulted in greater soil respiration compared to the fungus-inoculated treatment (E + ) because the extract can be considered as a microbial substrate which would enhance activity of microorganisms in the rhizosphere. With an increment in the drought stress, water repellency of the rhizospheric soil increased so that the 0.65FC treatment was significantly different from the two other treatments. The greatest value of water repellency index was obtained in the rhizosphere of plants inoculated with P. indica . The effects of plant type, drought stress levels and fungus treatments on pore size distribution parameter ( n ) and scaling parameter ( ? ) of the soil water characteristic curve were evaluated and showed that with an increment in drought stress, n increased, and adding fungus extract to the soil (Ex) and P. indica inoculated (E + ) treatments had the highest and lowest values of ? , respectively. The main effect of plant type on soil available water content (AW) was significant so that its value was greater in the rhizosphere of maize, but the effects of drought stress and fungus treaments were not significant. Overall, due to symbiosis of endophytic fungus P. indica with diverse plants, inoculation of plants with this fungus can be a more beneficial method (compared to adding fungus extract directly to the soil) to diminish the harmful effects of drought stress, and to improve soil quality for soil conservation and management purposes. Keywords : Endophyte, Extract of P. indica , Drought stress, Soil water repelleny, Soil water characteristic curve, Soil available water.