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Arbuscular mycorrhizal (AM) fungi predominate in grasslands, where they play a key role in enhancing plant water uptake and plant tolerance to drought. However, how plant defoliation, which is common to grazed and cut grasslands, modifies plant and AM fungi responses to drought remains unknown. Here, we examined how defoliation intensity modified plant and AM fungi responses to drought. This was done using an in situ factorial field experiment at Colt Park meadows, northern England, whereby mixed grassland communities were subjected to different intensities of defoliation in combination with simulated summer drought. We measured a range of plant, AM fungal, and soil microbial and chemical responses to defoliation and drought, both individually and in combination, and extracted neutral lipid fatty acid (NLFA) as an indicator of AM fungi energy storage status. High intensity defoliation significantly reduced root colonization by AM fungi, and the negative impact of drought on AM fungi extraradical hyphal length was amplified under high intensity defoliation. Drought had no effect on total shoot biomass but reduced specific root length and increased soil NLFA concentrations, indicating an increase in AM fungi energy reserves. However, defoliation dampened this response, implying that defoliation suppresses AM fungi energy reserves under drought. Our findings suggest that plant communities can maintain above-ground productivity under drought with the assistance of AM fungi symbiosis, but that defoliation suppresses positive plant-fungi interactions under drought. Taken together, our findings provide new insights into how drought and defoliation, a key feature of grassland management, combine to negatively impact the plant-AM fungi associations in grassland. • Defoliation suppressed positive plant-AM fungi interactions under drought. • High intensity defoliation amplified the drought-induced negative impact in AM fungi extraradical hyphal length. • Defoliation diminished the boost in AM fungi energy storage in neutral lipids triggered by drought. • High intensity defoliation significantly reduced the resilience of AM fungi to drought. [ABSTRACT FROM AUTHOR]