One-year-old olive trees (cv. Koroneiki) were grown in plastic containers of 50 000 cm3 under full daylight and 30, 60, and 90 % shade for two years. The effects of shade on leaf morphology and anatomy, including stomatal density and chloroplast structure, net photosynthetic rate (PN), stomatal conductance (gs), and fruit yield were studied. Shade reduced leaf thickness due to the presence of only 1-2 palisade layers and reduced the length of palisade cells and spongy parenchyma. The number of thylakoids in grana as well as in stroma increased as shade increased, while the number of plastoglobuli decreased in proportion to the reduced photosynthetically active radiation (PAR). The higher the level of shade, the lower the stomatal and trichome density, leaf mass per area (ALM), gs, and PN. Shade of 30, 60, and 90 % reduced stomatal density by 7, 16, and 27 %, respectively, while the corresponding reduction in PN was 21, 35, and 67 %. In contrast, chlorophyll a+b per fresh mass, and leaf width, length, and particularly area increased under the same shade levels (by 16, 33, and 81 % in leaf area). PN reduction was due both to a decrease in PAR and to the morphological changes in leaves. The effect of shade was more severe on fruit yield per tree (32, 67, and 84 %) than on PN indicating an effect on bud differentiation and fruit set. The olive tree adapts well to shade compared with other fruit trees by a small reduction in stomatal and trichome density, palisade parenchyma, and a significant increase in leaf area. and K. Gregoriou, K. Pontikis, S. Vemmos.