The pot experiment was carried out during September 2015 to January 2016 at instructional farm, College of Agricultural Engineering, UAS Raichur under rain shelter to study the effect of different water regimes, (i.e. T1:100, T2:90, T3:80, T4:70, T5:60 and T6:50) per cent of water application with available moisture holding capacity on grain yield and water use efficiency. Completely Randomized block design with four replications was used in this study. The results showed that there was significant difference between the yield and (WUE) under different levels of irrigation. The total irrigation water applied were (i.e., 211.98, 243.02, 225.78, 155.09, 135.51 and 105.62 mm/plant) under different water regime treatments (100, 90, 80, 70, 60 and 50 %) of available moisture holding capacity (AMHC) respectively. Grain yield productions under different treatments were 106.25, 171.25, 127.50, 75, 55 and 40.75 g/plant/pot at 100, 90, 80, 70, 60 and 50 per cent of AMHC respectively. The results showed that water use efficiency (WUE) at different treatments were 0.50, 0.70, 0.56, 0.48, 0.41 and 0.39 g/mm for (100, 90, 80, 70, 60 and 50 %) per cent of AMHC respectively. Therefore, the 90 % of AMHC treatment (T2) is recommended for groundnut irrigation for water saving. The comparison of actual crop coefficient that obtained by water balance technic in experiment and crop coefficient (Kc) values of groundnut for different crop growth stages were selected based on the values suggested by FAO (Allen et al., 1998) are similar in the treatment of 90 % (T2) of the AMHC. Furthermore, the result showed that the treatment of 90 per cent of Available moisture holding capacity (T2) seemed to be better adapted to product a high crop yield with acceptable yield coupling with water use efficiency in this region.