Olive has been widely grown around the Mediterranean Basin for around 5000 years, where productivity and survival of this long-lived evergreen tree in environments of low and variable rainfall depend on physiological characteristics but also on management. The tree exercises effective control of water loss by transpiration and can also withstand intense internal water deficit that in turn increases extraction of water from soil. Critical aspects of management that maintain, albeit limited, transpiration and metabolic activity during hot dry summer months, are directed at both crop and understorey. Strategic decisions are selection of cultivar, tree density, and canopy size, together with surface management as tilled soil or as cover crop of selected species. Tactical adjustments are seen in extra pruning of olives and timing of tillage, or of grazing, mowing, or herbicides to restrict growth and water use of the understorey, especially following dry winters and during dry summers. Survival of olive orchards in low-rainfall climates requires that canopies intercept a small proportion of incident radiation, depending upon rainfall amount, distribution, and soil water storage capacity. Crop water balance models can assist in defining optimum canopy size for productivity and survival. New olive production in the Mediterranean and now extending widely in the ‘New World’, including in Australia, deviates widely from traditional practice. Orchards are planted at higher density, are generally irrigated, and trees are formed to suit mechanical pruning and harvesting. The environmental adaptation and understanding of water relations of olive in traditional systems are of limited applicability to these new production systems. Rather, there are now new emphases on nutrition, irrigation, canopy management, assimilate relationships, and fruiting performance to add to the existing questions of the suitability of cultivars to new environments in terms of productivity and oil quality.