The long-term viability of rice production in the midsouthern United States could be affected by irrigation management strategy. This study was conducted to determine if rice sustainability can be improved through manipulation of the irrigation threshold. The effects of an alternate wetting and drying (AWD) irrigation threshold and cultivar on water applied, rice grain yield, seed quality, irrigation water use efficiency, and net returns were investigated at Stoneville, MS, on a Sharkey clay (very fine, smectitic, thermic Chromic Epiaquert) during the 2015 through 2017 growing seasons. Water applied increased exponentially from 316 mm for the AWD threshold of −40 cm to 1061 mm for the conventional flood. For both hybrid and inbred lines, rice grain yield decreased linearly at a rate of 14 kg ha −1 for each centimeter decrease in irrigation threshold. Alternate wetting and drying irrigation threshold had no effect on seed quality parameters including chalk, milling total, and milling whole. Net returns were higher for AWD compared to a conventional flood for all cultivars. The economically optimal irrigation threshold was dependent on cultivar and rice price. Converting from a conventional flood to AWD will likely improve the sustainability of rice production in the midsouthern United States.