Availability of water for food production is a global concern; thus, increasing water productivity has been become a necessary. Deficit irrigation is a good strategy to increase water use efficiency, but it may affect negatively on plant physiology and crop productivity. Little is known about the effect of marine algae extracts on water stress resistance and yield of onion grown on semiarid regions. Therefore, field experiments were conducted in 2018 and 2019 growing seasons to study the effect of foliar application of marine alga (Amphora ovalis) extracts (at rate of 0, 3, 6 or 9%) on onion grown under normal irrigation (80% of available soil water) or water stress (50% of available soil water). The field experiments were laid out in a split-plot design with four replicates. The highest dose of algal extract sprayed on onion grown under water stress significantly (P < 0.05) increased N, P, and K uptake by 116, 113, and 93% compared to the unsprayed plants. The application of 9% algal extract for onion grown under water stress significantly (P < 0.05) increased the bulb yield by 67 and 102%, respectively, in 2018 and 2019 growing seasons. Water stress reduced the chlorophyll production as a result of directing most of plant's energy to produce water-resistant materials such as proline and phenols. Algal extract reduced the negative effects of water stress and caused significant increases in onion growth and yield.