Olive, considered to be moderately salt tolerant, is commonly irrigated with marginal or low quality water. Exposure to relatively high salinity is detrimental to tree health and production. It was hypothesized that physiological response of olive trees to salinity leads to increased relative canopy temperature and thus is identifiable by means of thermal imagery. A controlled experiment was conducted in an arid climate zone with trees grown in lysimeters irrigated with water having 5 levels of salinity. Thermal images were acquired and tree-scale evapotranspiration, midday stem water potential (Ψ) and leaf stomatal conductance (g) were measured. Maximum canopy temperature differences between salinity treatments were more pronounced after the midday solar radiation peak. Canopy temperature increased as a function of salinity, similar to the response of Ψ and g, with significant differences found between the lower and higher salinity levels.