Drought stress is one of the greatest obstacles affecting field crop productivity in arid and semi-arid regions, and its severity and frequency are expected to increase due to human-induced changes to the environment and climate. Drought has led to rocky desertification in Karst regions. Cinnamomum migao is a unique, fast-growing medicinal plant of Southwest China that only thrives in Karst regions. Arbuscular mycorrhizal fungi (AMF) symbiosis alleviates drought stress in plants; however, establishment and function of the symbiotic interaction between AMF host plant in relation to the inoculation method remain unclear. Therefore, we conducted an experiment to investigate the effects of AMF species (Glomus etunicatum and Funneliformis mosseae) and two inoculation methods (seed vs. seedling inoculation) under drought stress on C. migao seedlings, and quantified mycorrhizal colonization, AMF spore density, root vigor, relative water content, C. migao growth, antioxidant enzyme activities, and osmotic adjustment. Inoculation with AMF (G. etunicatum and F. mosseae) positively affected the growth and root vigor of Cinnamomum migao under drought stress, regardless of the inoculation method. Additionally, both AMF species markedly upregulated antioxidant enzyme activities and osmotic adjustment substances, regardless of the inoculation method. Our results showed that the collective stimulatory effect of G. etunicatum is more efficient than that of F. mosseae. AMF application could promote afforestation with C. migao to prevent rocky desertification in Karst regions where water is the greatest limiting factor on plant growth and yield.