Scarcity of water is the most severe constraint for development of agriculture in arid and semi-arid areas. Under this condition, the need to use the available water economically and efficiently is unquestionable. Based on the actual crop need, irrigation management has to be improved so that the water supply to the crop can be reduced while still achieving high yield. A field experiment was carried out at Mehoni Agricultural Research Center, Raya Valley of Ethiopia, during 2016/17 season with objectives of determining the effect of deficit irrigation on Onion yield component and crop water productivity and the effect of Conventional, Alternate and Fixed furrow irrigation on yield and crop water productivity of onion. The treatment were five deficit irrigation levels (40, 55, 70, 85 and 100% ETc), and three furrow irrigation techniques (conventional, alternate and fixed furrow) were laid out in a random complete block design (RCBD) with three replications. The highest bulb yield was obtained at 100% ETc with conventional furrow method. In terms of irrigation and water use efficiency, 40% ETc deficit irrigation level application gave the highest irrigation water use efficiency and crop water use efficiency which was significantly superior to all other treatment. Among the irrigation water application methods, the highest water use efficiency was obtained with alternate furrow application method. On the other hand, the minimum water use efficiency was recorded with conventional furrow method. Alternative furrow irrigation (AFI) gave the highest crop water use efficiency and irrigation water use efficiency whereas conventional furrow irrigation (CFI) recorded the lowest. Better crop water use efficiency and irrigation water use efficiency were obtained in the AFI and fixed furrow irrigation (FFI), while the applied water in AFI was reduced by 50% of the CFI. Therefore, it can be concluded that increased water saving and associated water productivity can be achieved without significant reduction of yield in AFI with 100% ETc of irrigation level. AFI system appears to be a promising alternative.