Due to the scarcity and/or unreliability of canal water supply, seepage water is haphazardly used for sole irrigation or in conjunction with canal water in most small-scale irrigation schemes in northern Ethiopia. This has been a major cause of low crop yield and has aggravated soil salinization. The problem is more exacerbated for onion, which is the major irrigated vegetable crop and is sensitive to salinity. Thus, it is essential to assess a sustainable way to use both water resources conjunctively for the production of onion. A new study in the Ethiopian context was conducted to evaluate the effect of cyclic irrigation using non-saline canal water (EC, 0.41-0.78 dS m −1) and moderately saline seepage water (EC, 0.82-2.19 dS m −1) on onion yield and soil salinization for two seasons (2014/2015 and 2015/2016) in the Gumselassa irrigation scheme, Ethiopia. Four irrigation water treatments were applied with three replications consisting of: C (canal), S (seepage), 2CS (two canal and seepage) and CS (canal and seepage). In both seasons, the onion bulb yield variations between the C, 2CS and CS treatments were not significant; however, the S treatment reduced the onion yield significantly compared to all but CS in 2015/2016. The S treatment resulted in significant salt accumulation in the upper soil profile (0-20 cm). The alternate (C : S) cyclic option is thus recommended for alleviation of the problem of freshwater scarcity, without undue onion yield reduction and soil salinization in Gumselassa and similar irrigation schemes.