In this study, we examined the efficiency of a kaolinite clayey soil to mitigate water repellency of a sandy soil with olive trees. The treatment was applied to the soil zone below the tree canopy, which displayed the highest degree of water repellency [average water drop penetration time (WDPT) value = 820 s]. Both dry (incorporated onto the top soil) and wet clay applications (after dispersion in irrigation water) were examined in a replicated experiment, with control trees being used for comparison. The application rate of the clayey soil was maintained in both cases (wet and dry mode) equal to 1 kg m−2, while the effect of subsequent wetting and drying cycles on the treatment performance was evaluated. The results of the study verify that clay application was effective to mitigate soil water repellency. Dry supplementation displayed low efficiency (26% reduction of the air-dry WDPT compared with the control soil) within the first week of application. The efficiency of the dry-clay treatment increased to 76% after applying three subsequent wetting and drying cycles. In comparison with the dry mode, the wet clay was efficient immediately after application (74% reduction of the WDPT), indicating that the limiting step in the overall process was clay dispersion. Based on the findings of this study, it was proposed that wet clay application is of interest for controlling soil water repellency in agricultural land.