Alfalfa (Medicago sativa L.), a globally vital forage crop with abundant nutrition and high yield, is commonly planted in arid and semi-arid regions where water resources are scare, such as China. In order to adapt water limitation conditions, farmland mulching (FM) is gradually being applied in alfalfa production. However, the effects of FM on alfalfa in different climatic conditions and management practices should be investigated before concluding that it is universally effective. We performed a meta-analysis and regression analysis of 94 yield comparisons and 74 water use efficiency (WUE) comparisons from 19 peer-reviewed studies and founded that FM significantly increased alfalfa yield and WUE, on average by 38.5% and 43.7%, respectively, compared to non-mulching. However, the increase rate (IR) of yield and WUE varied with mulching type, region, management, and length of growth year. For yield, FM was more pronounced in Gansu, in regions with an average annual precipitation (AAP) of 400–600 mm, average annual temperature (AAT) < 0 °C, and altitude > 2000 mm, and with plastic film, all of the soil surface mulching, ridge–furrow planting, sowing rate (SR) < 20 kg ha–1 and nitrogen application rate (NAR) < 100 kg ha–1. Overall, AAP and altitude had significant positive effects on yield IR of mulching alfalfa, while AAT and SR had significant negative effects. The effects of these factors on yield IR varied across different quantiles. For WUE, FM was more beneficial in regions with AAP of 200–400 mm and AAT > 6 °C. Only SR had a significant negative effect on the WUE IR of mulching alfalfa as a whole, while the effects of AAP, AAT, and altitude were significant in some quantiles. Our findings confirm the benefits of FM to increase alfalfa yield and WUE in China, identify the conditions under which these results can be achieved, and also suggest that the benefits are site specific.