Our aim was to examine the effect of water stress on plant growth and development of two native plant species (Tetraclinis articulata and Crithmum maritimum) and on microbial community composition and activity in the rhizosphere soil, following the addition of an organic amendment, namely sugar beet residue (SBR), and/or the inoculation with an arbuscular mycorrhizal (AM) fungus, namely Glomus mosseae, in a non-sterile heavy metal-polluted soil. The AM inoculation did not have any significant effect on plant growth of both species. In T. articulata, SBR increased shoot growth, foliar P, total phospholipid fatty acids (PLFA), fungi-related PLFA, AM fungi-related neutral lipid fatty acid, bacterial gram-positive/gram-negative PLFA ratio and the beta-glucosidase and dehydrogenase activities. SBR and AM inoculation increased phosphatase activity in T. articulata plants grown under drought conditions. In both plants, there was a synergistic effect between AM inoculation and SBR on mycorrhizal colonisation under drought conditions. In C. maritimum, the increase produced by the SBR on total amounts of PLFA, bacterial gram-positive-related PLFA and bacterial gram-negative-related PLFA was considerably higher under drought conditions. Our results suggest that the effectiveness of the amendment with regard to stimulating microbial communities and plant growth was largely limited by drought, particularly for plant species with a low degree of mycorrhizal colonisation.