A two-season field experiment was consecutively conducted in 2015 and 2016 to study the effect of partial root-zone drying (PRD) irrigation on physiological response, yield and water use efficiency (WUE) of olive (Olea Europaea L.) under semi-arid conditions. Three olive cultivars ('Arbequina', 'Arbosana' and 'Chetoui') were exposed to four irrigation regimes: a control treatment (100% crop evapotranspiration [ETC]) and three PRD treatments (100% PRD, 75% PRD and 50% PRD). Under PRD irrigation, there were significant differences between cultivars in terms of all traits studied. Stem water potential (psi stem) had been significantly affected by irrigation regime. Also, PRD treatments decreased net photosynthesis rate (Pn), stomatal conductance (gs) and transpiration rate (E) in all cultivars. A decrease in maximum efficiency of photosystem II (Fv/Fm) and effective efficiency of photosystem II (phi PSI) has been observed under PRD irrigation. This decrease did not limit the overall photosynthesis process mainly in 'Arbequina' and 'Chetoui'. Hence, a greater reduction in (gs) and (E) and smaller reduction in (Pn) led to a remarkably higher photosynthetic water use efficiency (WUEi). 'Arbequina' shows significant improvements of oil content and WUE under 50% PRD over 'Arbosana' and 'Chetoui'. Although the 50% treatment received approximately 50% less water compared to the control treatment, total yield was reduced only by an average of 7% during the high yield season (2016).