To meet future food demand and sustainability requirements of society, the agriculture sector faces challenges in both the institutional dimension and the technological dimension. One of the main concerns regarding the current agricultural production pattern is the tremendous amount of water it requires to maintain and boost output. With a changing climate and increasing demand from civil uses, promoting both water allocation efficiency and water application efficiency becomes the focus of policy design. The unintended consequences of water policies, however, have led to extensive debates. This study addresses the key question of whether irrigation efficiency improvement leads to reduced per-area water use. The study assembles a national county-level panel data set on water withdrawal, irrigation technology, and farm operation and demographics. The empirical results show that a higher irrigation efficiency is associated with a lower per-area water application in US crop production. Two alternative efficiency measures are proposed. Depending on how the efficiency is measured, a one standard-deviation efficiency improvement (6–30%) in irrigation can reduce 6–11% of water withdrawal in US crop production. The water saving is about 0.06–0.12 mm/day given a county average irrigation water use of 1.07 mm/day.