A field experiment was conducted in a semi-arid region in northern China to evaluate the effects of bentonite soil amendment on field water-holding capacity, plant available water, and crop photosynthesis and grain quality parameters for millet [Setaria italic (L.) Beauv.] production over a 5-year period. Treatments included six rates of bentonite amendments (0, 6, 12, 18, 24 and 30 Mg ha−1) applied only once in 2011. The application of bentonite significantly (P < 0.05) increased field water-holding capacity and plant available water in the 0–40 cm layer. Bentonite also significantly (P < 0.05) increased the emergence rate, above-ground dry matter accumulation (AGDM), net photosynthesis rate (Pr), transpiration rate (Tr), soil and plant analysis development (SPAD) and leaf water use efficiency (WUE). It also increased grain quality parameters including grain protein, fat and fiber content. Averaged over all the years, the optimum rate of bentonite was 24 Mg ha−1 for all plant growth and photosynthesis parameters except for grain quality where 18 Mg ha−1 bentonite had the greatest effect. This study suggests that bentonite application in semi-arid regions would have beneficial effects on crop growth and soil water-holding properties.