Agricultural production in Ethiopia is primarily rainfed, which is characterized by its erratic and often inadequate nature. Women‐headed households are more susceptible to the resulting poor agricultural production. Hence, small‐scale irrigation has been considered as a solution in the country. However, research on its social and economic contribution for these households is limited. Thus, this study aimed at closing this research gap taking Kilte‐Awulaelo District as a case study. The study covered a total of 205 respondents (187 individuals and one group discussion with 18 participants) from three villages. Data were obtained using semi‐structured questionnaires taking changes in household income, housing improvement, resource control, access to social services, and level of community participation as major indicators. The survey indicated that there was an improvement in women‐headed households' overall social and economic benefits after introducing small‐scale irrigation. Small‐scale irrigation significantly increased women‐headed households' income from livestock and crop production by 24.3% and 68.8%, respectively. This led women‐headed households to have access to control of household resources, financial independency, profit, employment opportunities, psychological well‐being, and community participation. It can be concluded that small‐scale irrigation agriculture played a significant role in empowering women‐headed households.