Combined water and phosphorus (P) deficits limit soybean yield. In a previous study, P application improved grain yield in soybean under drought, but how the P application improved grain yield under drought is not clear. Pot experiments were conducted to investigate why added P increases yield under water stress in two soybean genotypes with contrasting root traits and grain yield. Water and P deficits significantly reduced flower number and filled-pod number, and thus significantly reduced the grain number and grain yield, while P application significantly increased flower number, filled-pod number, grain number and grain yield under both well-watered (WW) and cyclic water stress (WS). P deficit significantly decreased daily water use during flowering [from 537 mL at 120 (P120) mg P kg–1 dry soil to 343 mL with no added P (P0)] and podding (from 578 mL at P120 to 409 mL at P0), which was positively correlated with flower number, filled-pod numbers and total biomass at maturity in both the WW and WS treatments. For root traits, total root length and root surface area were significantly reduced under WS, while applied P increased root length and root surface area, but not lateral root density and adventitious root branch density. P application (P60 and P120) significantly increased root length and root surface area at flowering in the WW and WS treatments. Daily water use during flowering and podding was significantly positively correlated with root length and root surface area. We concluded that P application increased root growth and increased water use during flowering and podding, which had a positive effect on flower number filled-pod number, and grain yield.