Federal and state public water policy encourages farmers to increase their efficiency in applying irrigation water. The expectation is that more efficient irrigators will apply less water to meet crop needs. Consequently, conserved water can be made available for endangered species protection without curtailing agricultural production. This paper investigates the hydrologic circumstances in which increased application efficiency generates water savings. The answer depends on the fate of the applied water that is lost to the field through percolation and runoff. To the extent that field losses return to river of origin through surface or subsurface flows, increased application efficiency does not conserve water, and likely results in more intensive consumptive use. Reliable conservation generally requires that farms consume less water either by irrigating fewer acres, switching to crops requiring less water, or irrigating current crops at a deficit.