Water shortage in China, particularly in the north and northwest of China, is very serious. While the water shortage in this region is severe, irrigation water use efficiency is only about 40%, with a typical agricultural water use efficiency of about 0.46 kg m_3 It is widely believed that an increase in the agricultural water use efficiency is the key to mitigating water shortage and reducing climate change effects. This paper reviews water-saving agricultural systems and approaches to improve agricutural water use efficiency in the arid and semiarid areas of China. The paper investigates biological mechanisms of water-saving agriculture and water-saving irrigation technologies, including low pressure irrigation, furrow irrigation, plastic mulches, drip irrigation under plastic, rainfall harvesting and terracing. To sum up, considerable potential for further improvement in agricultural water use efficiency in the region depends on effective conservation of moisture and efficient use of the limited water.