Alfalfa, Medicago sativa L., cultivars, breeding lines and germplasm releases (populations) and Rhizobium meliloti L. strains that exhibit nitrogen fixation efficiency and tolerance to salinity and drought stresses should enhance seedling establishment, increase yields, reduce nitrogen dependency on petroleum-based nitrogen fertilizers, and allow wider use of irrigated lands in semiarid and a rid regions. In vitro experiments were conducted to determine relative salt (sodium chloride -- NaCl) tolerance: l) during germination and early seedling growth of 229 alfalfa populations from North Africa, the Middle East and the United States, 2) survival and growth of 92 rhizobial strains obtained from different laboratories in the United States or isolated from host plants growing in saline and arid regions of the Intermountain west, 3) compatibility, nodulation and nitrogen fixation efficiency of the most salt-tolerant alfalfa populations and rhizobial strains, and 4) survival, nodulation and nitrogen fixation efficiency of the most salt-tolerant alfalfa populations and rhizobial strain tested under drought conditions. Results from screening of alfalfa at salinity levels of 0 to 3.2 S m-1 (0.1 S m-1 = 640 mg L-1 = 10 mM NaCl at 25° C) indicated 29 populations exhibited salt tolerance at 2.8 S m-1. At salinity levels of 0 to 7.2 S m-1, 14 rhizobial strains exhibited salt tolerance at 6.4 s m-1. Compatibility, nodulation and nitrogen fixation efficiency in the 29 alfalfa populations and the 14 rhizobial strains under controlled conditions showed that four of the rhizobial strains were highly compatible with all 29 populations. These 29 populations and four strains were then exposed to 0 to 1.6 S m-1 NaCl, with the result that nitrogen was fixed with highly compatible symbionts at 1.6 S m-1 NaCl. From these results, the six most highly compatible alfalfa populations and the best overall rhizobial strain were combined and tested under simulated drought stress. These populations were able to fix more nitrogen under drought stress (-0.76 MPa) (0.088 nmol seedling-1 s-1) than they did under salt stress (1.6 S m-1) (0.066 nmol seedling-1 s-1). The in vitro screening technique for acetylene reduction appears to be a useful tool for detecting physiological changes due to salinity and water stresses and for measuring seedling nitrogen fixation efficiency. Breeding for drought and salinity tolerance in conjunction with high nitrogen fix ing potential may be more realistic than breeding strictly for nitrogen fixation without regard for environmental adaptation.