Olive production in the first few years after planting depends on how the canopy covers the hedgerow and develops flowers. Therefore, optimum irrigation management should look for the minimum amount of water required for maximum growth and bud initiation. The response of a young hedgerow olive orchard to different irrigation strategies was recorded for 3 years after planting in 2003. Observations included stem water potential (Ψstem), leaf conductance (gl), shoot and trunk growth, canopy development, and flowering. During the first year, olives received 74 mm of irrigation. During the second and third years, three irrigation treatments (T2, T3, and T4) were scaled back from a control (T1) that was irrigated to maintain soil close to water-holding capacity. T1 received 56 and 106 mm of irrigation in the second and third years, respectively. Treatments T2, T3, and T4 received 82%, 64%, and 46% of the water applied to T1 in the second year and 76%, 72%, and 29% in the third year of growth, respectively. Trees in T1 displayed different physiological and growth behaviors between years. Ψstem, gl, and shoot growth were 131%, 31%, and 56% lower in the third than in the second year, respectively. Irrigation treatment had no significant effect on evaluated parameters in the second year, except on Ψstem in T4 that fell below that of the other treatments in late September. In the third year, shoot growth, trunk diameter, and leaf area density in T4 decreased 52%, 13%, and 31% compared with T1, respectively. Nevertheless, external surface area and canopy volume were not significantly affected by irrigation treatment. The start of flowering, recorded in the third and fourth years, was not significantly affected by the irrigation received in previous years. Because water stress did not advance flowering, maximum growth should be the main objective in irrigation management of young olive orchards. No differences were observed between T3 and T1 in any of the vegetative, canopy development, or inflorescence parameters recorded, although Ψstem and gl were significantly lower in T3. During the second and third years, T3 can be considered the most efficient irrigation treatment with 36 and 76 mm of irrigation for each year, respectively.