It has been postulated that osmotic effects on plant tissue are mediated by abscisic acid (ABA). Hybrid larch (Larix kaempferi (Lambert) Carr. × L. decidua Mill.) plantlets, transformed with the ABA-inducible wheat Em promoter associated with the Gus reporter gene, were axenically inoculated with two ectomycorrhizal fungi: Cenococcum geophilum Fr., considered tolerant to water stress, and Laccaria bicolor (Marie) Orton, considered less tolerant to drought. The mycorrhizal and non-mycorrhizal transgenic plantlets were subjected to osmotic stress by adding polyethylene glycol (PEG) to the culture medium. In the presence of PEG, L. bicolor and C. geophilum reduced shoot water potential and turgor potential, but increased host osmotic potential. Treatment of plantlets with PEG induced a significant increase in endogenous ABA concentrations. Laccaria bicolor and C. geophilum behaved similarly and significantly decreased the ABA response of plantlets to PEG treatment. Moreover, inoculation with either fungus regulated the ABA response of the plantlets even when the fungus was separated from the host by a cellophane sheet that prevented mycorrhiza formation. Although the wheat Em promoter was inducible in larch plantlets, it was not regulated by endogenous ABA. Induction of the wheat Em promoter in larch plantlets depended on organ type, with maximum induction in the root apex. Induction of the Em promoter was significantly decreased by mycorrhizal inoculation.