Twenty nine seed sources representing natural distribution range of Dalbergia sissoo in India and in Nepal were screened to evaluate the variations in mycorrhizal colonization and nutrient uptake and to identify good mycorrhizas forming seed sources. VAM [vesicular arbuscular mycorrhizas] colonization rate varied significantly between 24 to 54% and 17 to 46% while mycorrhizal root length ranged from 6-32 and 5-22 cm among seed sources during the first and second year, respectively. This showed influence of seed source on mycorrhizal colonization. Variations in number of nodules and nodule dry weight were significant and were positively correlated with mycorrhizal colonization and seed source. Seedling growth, dry matter accumulation and nutrient uptake varied significantly and improved in seed sources with good mycorrhizal formation which indicated mycorrhizal effect and this response was likely to be seed source dependent. Among the seed sources tested, Lukhimpurkheri, Tanakpur, Allahabad, Badaun and Kalpi appeared to be the best germplasms with regard to mycorrhizal formation, seedling growth and biomass production. Therefore, these seed sources could be considered while making selection of genotypes with good symbiotic response and for raising nursery stock for afforestation of degraded lands. The utility of seed source/fungus genotype-dependent differences in VAM symbiosis in tree breeding is discussed.