Improving water use efficiency (WUE) and soil fertility is relevant for apple production in drylands. The effects of intercropmulch (IM) of crown vetch (Coronilla varia L.) combined with different fertilizer treatments on WUE of apple trees and soil fertility of apple orchards were assessed over three years (2011, 2013 and 2014). A split-plot design was adopted, in which the main treatments were IM and no intercrop-mulch (NIM). Five sub-treatments were established: no fertilization (CK); nitrogen and phosphorus fertilizer (NP); manure (M); N, P and potassium fertilizer (NPK); and NPK fertilizer combined with manure (NPKM). Due to mowing and mulching each month during July-September, the evapotranspiration for IM was 17.3% lower than that of NIM in the dry year of 2013. Additionally, the soil water storage of NPKM treatment was higher than that of CK during the experimental period. Thus, single fruit weight and fruit number per tree increased with IM and NPKM application. Moreover, applying NPKM with IM resulted in the highest yield (on average of three years), which was 73.25% and 130.51% greater than that of CK in IM and NIM, respectively. The WUE of NPKM combined with IM was also the highest in 2013 and 2014 (47.69 and 56.95% greater than applying IM alone). In addition, due to application of IM combined with NPKM, soil organic matter was increased by 25.8% compared with that of CK (in NIM). Additionally, application of IM combined with NPKM obtained more economic net return, compared to other combinations. Therefore, applying NPKM with IM is recommended for improving apple production in this rain-fed agricultural area.Additional key words: apple orchard; evapotranspiration; soil organic matter; mulching; chemical fertilizer; manure. Abbreviations used: CK (no fertilization); ET (evapotranspiration); ET bm (ET from late March to early July); ET mow (ET from early July to late September); ET tot (total ET); IM (intercrop-mulch); M (manure); NIM (no intercrop-mulch); NP (nitrogen and phosphorus fertilizer); NPK (nitrogen, phosphorus and potassium fertilizer); NPKM (NPK fertilizer combined with manure); SOM (soil organic matter); WUE (water use efficiency); WUE mow (WUE after mowing); WUE tot (total WUE).