Drought stress is the main cause of mortality of holm oak (Quercus ilex L.) seedlings in forest plantations. We therefore assessed if drought hardening, applied in the nursery at the end of the growing season, enhanced the drought tolerance and transplanting performance of holm oak seedlings. Seedlings were subjected to three drought hardening intensities (low, moderate and severe) for 2.5 and 3.5 months, and compared with control seedlings. At the end of the hardening period, water relations, gas exchange and morphological attributes were determined, and survival and growth under mesic and xeric transplanting conditions were assessed. Drought hardening increased drought tolerance primarily by affecting physiological traits, with no effect on shoot/root ratio or specific leaf mass. Drought hardening reduced osmotic potential at saturation and at the turgor loss point, stomatal conductance, residual transpiration (RT) and new root growth capacity (RGC), but enhanced cell membrane stability. Among treated seedlings, the largest response occurred in seedlings subjected to moderate hardening. Severe hardening reduced shoot soluble sugar concentration and increased shoot starch concentration. Increasing the duration of hardening had no effect on water relations but reduced shoot mineral and starch concentrations. Variation in cell membrane stability, RT and RGC were negatively related to osmotic adjustment. Despite differences in drought tolerance, no differences in mortality and relative growth rate were observed between hardening treatments when the seedlings were transplanted under either mesic or xeric conditions.