This study investigated how two different N sources used as fertilizer (NO3− or NH4+) interact with an inoculated arbuscular mycorrhizal (AM) fungus (Glomus etunicatum) in an Andisol from southern Chile. The effect of NO3− or NH4+ on mycorrhizal and non-mycorrhizal wheat plants was measured on key root–soil interface activities: pH, acid phosphatase (P-ase) activity and P availability. Root AM colonization, extraradical mycelium length and spore number were also examined at three stages of AM symbiosis development (120, 150 and 240 days after sowing, DAS). The effect of N-source on AM propagule formation was used as an index of the quality and vigor of AM colonization. Mycorrhizal root length was greater with NO3− than with NH4+ at all times. The NO3− source also improved extraradical mycelium density, which reached its maximum at 150 DAS. At each harvest the spore number in the rhizosphere soil was also greater with NO3− fertilization. This NO3− effect on spore formation ranged from 20% at a 120 DAS to 287% at a 240 DAS increase, compared with NH4+. Extraradical mycelium and AM efficiency for P acquisition appeared to be related. The particular fungus/plant metabolism as affected by N sources (NO3− or NH4+) applied did not result in differential plant growth or in changes in N plant acquisition, but affected AM development and activity. Differences in soil pH, available P or P-ase activity in soil seems not to be responsible for the improved physiological status of mycorrhizal development in NO3− fed plants. Mycorrhizal propagule formation in this soil and the high persistence of extraradical mycelium are important factors which may have a strong influence on the next crop, and thus, this aspects should be considered when a cropping system is designed. The influence of N sources on AM performance is of ecological and practical interest in volcanic soils when conventional management is used. This work was supported by Fondecyt, grant 1990756, from Comision Nacional Cientifica y Tecnologica, Chile. The authors also acknowledge financial support given to R. Azcon for travel and expenses while staying in Chile through Andes Foundation project C-13755-28. Peer reviewed