Water shortage has encouraged the quest for alternative sources of water for food production and agricultural development. Recycled water (RW) is one of the most available water resources with great potential for use in farm irrigation. This experiment was carried out to investigate the use of RW as the irrigation source and its application method, subsurface leaky irrigation (SLI) system or surface irrigation, in an orchard with young olive trees in central Iran. The results revealed that the SLI system was able to enhance tree growth, leaf area, maximum fluorescence (Fv/Fm) and photosynthesis rate by 68%, 26%, 4%, and 42%, respectively. In addition, trees irrigated with the SLI system using RW exhibited increased N and Mg uptakes by 138% and 8%, respectively. Plants irrigated with RW showed a growth improvement (42%), leaf area (26%), and photosynthesis rate (23.4%) compared with those irrigated with clean water. Furthermore, Mg, Na, K, P, and N content increased by 12%, 59%, 30%, 7%, and 92%, respectively, in leaf tissue when RW was applied. The results indicated that RW could be employed as a reliable irrigation source especially when it was delivered with the SLI system.