ABSTRACT Agricultural water demand is increasing with inefficient delivery mechanisms in Ethiopia. This experiment was conducted to investigate the effect of alternative furrow irrigation against other irrigation systems on onion crop (Allium cepa L.) yield and water use efficiency in Basketo special district. The experiment comprised of four levels of treatments (alternative furrow irrigation, fixed furrow irrigation, farmers practice) and 50% of alternative furrow irrigation. The analysis of variance for the combined means showed that alternative furrow gave the highest mean total yield (25.32 ton ha−1) and marketable yield (17.35 ton ha−1) without significantly varying farmer practices and fixed, while 50% alternative furrow gave the minimum total yield (21.23 ton ha−1) and marketable yield (10.35 ton ha−1). Alternative and 50% alternative showed 8% of yield and 40% of marketable yield difference. Alternative furrow irrigation also gave higher water use efficiency than others and 50% of alternative furrow irrigation saved higher water (60%) and other saved less. Economic profitability analysis showed that alternative furrow irrigation had given the highest gross field Benet and benefit cost ratio and 50% of alternative furrow irrigation gave the least of both parameters. Alternative furrow irrigation can be appropriate for better onion yielding and water saving in areas where there is water scarcity.