Ascorbate is a major antioxidant and radical scavenger in plants. Monodehydroascorbate reductase (MDAR) and dehydroascorbate reductase (DHAR) are two enzymes of the ascorbate-glutathione cycle that maintain ascorbate in its reduced state. MDAR2 (At3g09940) and DHAR5 (At1g19570) expression was upregulated in the roots and shoots of Arabidopsis seedlings co-cultivated with the root-colonizing endophytic fungus Piriformospora indica, or that were exposed to a cell wall extract or a culture filtrate from the fungus. Growth and seed production were not promoted by Piriformospora indica in mdar2 (SALK_0776335C) and dhar5 (SALK_029966C) T-DNA insertion lines, while colonized wild-type plants were larger and produced more seeds compared to the uncolonized controls. After 3 weeks of drought stress, growth and seed production were reduced in Piriformospora indica-colonized plants compared to the uncolonized control, and the roots of the drought-stressed insertion lines were colonized more heavily by the fungus than were wild-type plants. Upregulation of the message for the antimicrobial PDF1.2 protein in drought-stressed insertion lines indicated that MDAR2 and DHAR5 are crucial for producing sufficient ascorbate to maintain the interaction between Piriformospora indica and Arabidopsis in a mutualistic state.