Orchards planted in clay soils and irrigated with treated wastewater (TWW) for many years, have demonstrated tree and yield degradation, that could not be related to known hazards of TWW such as salinity or boron toxicity. Our hypothesis is that high Na+ and organic matter content in TWW combined with high clay content in soil results in poor root zone aeration, leading to low oxygen levels for root respiration, and to development of reduced conditions and nitrite accumulation up to toxic levels. A field experiment was conducted in an 8-years old avocado orchard planted in heavy soil and irrigated with TWW to examine the following control and corrective treatments: control, TWW irrigation three times a week (CON-TWW); low frequency TWW irrigation (LFI-TWW); tuff-filled aeration tranches irrigated with TWW (TUF-TWW); changing water quality by 1:1 mixing TWW with freshwater (MIX); and freshwater irrigation control (CON-FW). The effects on oxygen levels, reduction potential, root-zone soil solution chemical species, and the trees’ response were monitored. Oxygen level in the root zone was very sensitive to the irrigation events, while redox potential was not much affected by each event. The CON-TWW treatment demonstrated the lowest average and minima oxygen levels throughout the irrigation season, remained most of the time in the suboxic redox state (14> pe+pH >9), and was also characterized by presence of nitrite in the soil solution. Switching to freshwater, as well as MIX and LFI-TWW treatments, increased oxygen levels, kept the soil permanently in the oxic redox state (pe+pH >14) and prevented nitrite formation. The highest oxygen level prevailed in the TUF-TWW treatment, however the redox state in this treatment was lower than in the other treatments. Our results imply that improvement of aeration in the root zone can ameliorate the damage of long-term TWW irrigation in clay soils.