Two field experiments were conducted on a sandy clay loam soil, in a private farm at Kafr Dawood, Menoufiya, Egypt during two successive summer seasons of 2006-2007 to assess the response of Sorghum bicolor L. to inoculation with Azotobacter chroococcum and/or AM mycorrhia fungi, applied by two different inoculation methods in soil amended by compost water extracts (CWE). The growth, microbiolgical, physiological and yield parameters of sorghum plants were determined. The results proved that, shoot and root dry weights of sorghum, total bacterial population dynamic in sorghum rhizospheric zoon were positively affected when a combination of A. chroococcum and/or AM mycorrhia fungi and CWE. Furthermore, the combined inoculations significantly increased nitrogenase activity by 3.5 times, dehydrogenase activity by two times over control (full NPK) especially the treatment CWE + AMSA + A.C. AM mycorrhizal infections % in sorghum roots as well as AM mycorrhizal spore numbers in soil after harvest was increased in the treatment CWE + AMSA + A.C (The infection was 100% and 379 spore/g soil). On the other hand the total NPK contents of sorghum shoots were significantly increased with combined treatments. Moreover, the two treatments CWE +AMSA + A.C and CWE +AMGC + A.C showed almost 1.2 times increase in grain yield (g/plant) over control (full NPK). There was insignificant increase in sorghum grain yield per Feddan (ardab/fed), the two treatments CWE +AMSA +A.C and CWE +AMGC+ A.C gave almost 28.0 ard/fed. In addition, there was also a significant increase in grains nitrogen contents and total carbohydrates. In spite of the slight superiority of the treatment CWE +AMSA + A.C over the treatment CWE +AMGC + A.C in all parameter tested, we recommended the use of grain coating inoculation method because this method is more easier, has an economic impact in saving more quantities of inocula that used to expand more areas and also shipping costs. In addition, we can also recommended that the use of CWE in agriculture combined with free-living nitrogen fixers and AM mycorrhiza inoculants is considered to be more efficient than using it as single inoculant.