A field experiment was conducted at Melkassa Agricultural Research Centre in the Central Rift Valley of Ethiopia (located at latitude 8° 24'N, longitude 39° 21'E and altitude 1,550 m above sea level) during the 2008/2009 dry season to study the 'Effect of deficit irrigation and different mulch covers on water use and yield of drip irrigated onion (Allium Cepa L., cultivar: Bombay Red)'. A drip irrigation system with 144 laterals was used for the experiment. Two factors, namely deficit irrigation at four levels (0, 25, 50 and 75% of Total Available Water, TAW) and mulch covers of four different types (no mulch or bare soil, straw mulch, clear plastic and black plastic) were combined in a randomized complete block design and laid out as treatments in plots 0.4 m x 5 m. Three replications were used. Results showed that onion bulb yield decreased with increase in levels of water deficit. In contrast, both crop water use and irrigation water use efficiencies increased with increase in water deficit level. Use of mulch significantly increased bulb yield. Plots with mulch covers yielded higher than 30 t.ha -1 compared to the bare soil yield of 28.3 t.ha -1 (straw>clear plastic>black plastic>bare soil). Water use was similarly reduced by the presence of mulch covers. A hydraulic performance evaluation of the drip system showed there was an average emitter flow rate variation of 13.7%, a coefficient of uniformity of 85% and an overall irrigation application efficiency of 94.4%.