We conducted a two-year study of deficit irrigation impact on peach yield and quality in semi-arid northwest China. Over two years, four-year-old peach trees were irrigated at 100, 75, 50 and 25% of peach evapotranspiration(ET_c), here, ET_c= Coefficient(Kc)×Local reference evapotranspiration(ET_o). During the April-July fruit production season we measured root zone soil water depletion, sap flow velocity, net photosynthetic rate(P_n), transpiration rate(T_r), stomatal conductance(G_s), water use efficiency(WUE=P_n/T_r), fruit quality, and yield under a mobile rain-out shelter. Increased soil water depletion reasonably mirrored decreasing irrigation rates both years, causing progressively greater water stress. Progressive water stress lowered G_s, which in turn translated into lower T_r as measured by sap flow. However, mild deficit irrigation(75% ET_c) constricted T_r more than P_n. P_n was not different between 100 and 75% ET_c treatments in both years, and it decreased only 5–8% in June with higher temperature than that in May with cooler temperature. Concurrently under 75% ET_c treatment, T_r was reduced, and WUE was up to 13% higher than that under 100% ET_c treatment. While total fruit yield was not different under the two treatments, because 75% ET_c treatment had fewer but larger fruit than 100% ET_c trees, suggesting mild water stress thinned fruit load. By contrast, sharply decreased T_r and P_n of the driest treatments(50 and 25% ET_c) increased WUE, but less carbon uptake impacted total fruit yield, resulting 13 and 33% lower yield compared to that of 100% ET_c treatment. Irrigation rates affected fruit quality, particularly between the 100 and 75% ET_c trees. Fewer but larger fruit in the mildly water stressed trees(75% ET_c) resulted in more soluble solids and vitamin C, firmer fruit, and improved sugar:acid ratio and fruit color compared to the 100% ET_c treatment. Overall, trees deficit irrigated at 75% ET_c maintained yield while improving fruit quality and using less water. We conducted a two-year study of deficit irrigation impact on peach yield and quality in semi-arid northwest China. Over two years, four-year-old peach trees were irrigated at 100, 75, 50 and 25% of peach evapotranspiration (ET_c ), where ET_c = Coefficient (Kc) × Local reference evapotranspiration (ET_o). During the April-July fruit production season we measured root zone soil water depletion, sap flow velocity, net photosynthetic rate (P_n), transpiration rate (T_r) , stomatal conductance (G_s), water use efficiency (WUE = P_n / T_r), fruit quality, and yield under a mobile rain-out shelter. Increased soil water depletion reasonably mirrored decreasing irrigation rates both year, causing progressively greater water stress. Progressive However, mild deficit irrigation (75% ET_c) constricted T_r more than P_n. P_n was not between between 100 and 75% ET_c treatments in both years, and it decreased only 5-8% in June with higher temperature than that in May with cooler temperature. Concurrently under 75% ET_c treatment, T_r was reduced, and WUE was up to 13% higher than that under 100% ET_c treatment. While total fruit yield was not different under the two treatments, because 75% ET_c treatment had fewer but larger fruit than 100% ET_c trees, suggesting mild water stress thinned fruit load. By contrast, sharply decreased T_r and P_n of the decreased treatments (50 and 25% ET_c) increased WUE, but less Irrigation rates affected fruit quality, particularly between the 100 and 75% ET_c trees. Fewer but larger fruit in the mildly water stressed trees ( 75% ET_c) resulted in more soluble solids and vitamin C, firmer fruit, and improved sugar: acid ratio and fruit color compared to the 100% ET_c treatment. Overall, trees deficit irrigated at 75% ET_c maintained yield in while improving fruit quality and using less water.