Water supply is a key issue for irrigated alfalfa. Water applications to alfalfa range from 610 to over 2540 mm per year, approximately 4.9 to 6.8 billion m3, or about 20% of the agricultural water used in the state of California. Conflicts between urban, environmental and agricultural uses of water are exacerbated during drought periods. Orderly economic water transfers from agriculture have been proposed as a strategy to manage water conflicts throughout the West. Deficit irrigation of alfalfa has been proposed as an alternative to fallowing. Field trials were established in 2002-2005 in the Klamath Basin and Sacramento Valley of California to examine impacts of deficit irrigation strategies, including cessation of irrigation during summer, and rewatering in the fall. These regions differ dramatically in climate, adapted varieties, and numbers of cuttings (3-4 for Klamath, 6-7 for Sacramento Valley). The studies showed a yield reduction of 1.3 and 1.6 Mg ha-1 at two Intermountain locations when irrigation was withdrawn after 1st cutting. In the Sacramento studies yield was reduced 3.0 and 6.1 Mg ha-1 when irrigation was completely withdrawn in August. Few long-term impacts on alfalfa stand were observed in these studies. Variety choice, to date, has less impact than soil type or other factors on success of deficit irrigation, but longer-term studies are warranted. High water tables at some sites complicated the water savings issue. Potential water savings from these practices ranged from 600 to 850 mm of water in the Sacramento Valley and 280 to 530 mm in the Klamath Basin. Further research on soil specific factors, genetics, and crop management issues is needed. Deficit irrigation strategies for alfalfa may provide opportunities for economic water transfers, while reducing the negative environmental effects of fallowing, maintaining forage production, on-farm profitability, and sustaining rural communities.