The productivity of olive trees in arid and semi-arid environments is closely linked to irrigation. It is necessary to improve the efficiency of irrigation techniques to optimise the amount of olive fruit produced in relation to the volume of water used. Partial root-zone drying (PRD) is a water saving irrigation technique that theoretically allows the production of a root-to-shoot signal that modifies the physiology of the above-ground parts of the plant; specifically reducing stomatal conductance (g_s) and improving water use efficiency (WUE). Partial root-zone drying has been successfully applied under field conditions to woody and non-woody crops; yet the few previous trials with olive trees have produced contrasting results. Thirty year-old olive trees (Olea europaea ‘var. Chetoui’) in a Tunisian grove were exposed to four treatments from May to October for three-years: ‘control’ plants received 100% of the potential evapotranspirative demand (ETc) applied to the whole root-zone; ‘PRD₁₀₀’ were supplied with an identical volume of water to the control plants alternated between halves of the root-zone every ten-days; ‘PRD₅₀’ were given 50% of ETc to half of the root-system, and; ‘rain-fed’ plants received no supplementary irrigation. Allowing part of the root-zone to dry resulted in reduced vegetative growth and lower yield: PRD₁₀₀ decreased yield by ~47% during productive years. During the less productive years of the alternate bearing cycle, irrigation had no effect on yield; this suggests that withholding of water during ‘off-years’ may enhance the effectiveness of irrigation over a two-year cycle. The amount and quality of oil within the olive fruit was unaffected by the irrigation treatment. Photosynthesis declined in the PRD₅₀ and rain-fed trees due to greater diffusive limitations and reduced biochemical uptake of CO₂. Stomatal conductance and the foliar concentration of abscisic acid (ABA) were not altered by PRD₁₀₀ irrigation, which may indicate the absence of a hormonal root-to-shoot signal. Rain-fed and PRD₅₀ treatments induced increased stem water potential and increased foliar concentrations of ABA, proline and soluble sugars. The stomata of the olive trees were relatively insensitive to super-ambient increases in [CO₂] and higher [ABA]. These characteristics of ‘hydro-passive’ stomatal behaviour indicate that the ‘Chetoui’ variety of olive tree used in this study lacks the physiological responses required for the successful exploitation of PRD techniques to increase yield and water productivity. Alternative irrigation techniques such as partial deficit irrigation may be more suitable for ‘Chetoui’ olive production.