The accurate quantification of crop water use or evapotranspiration (ET) under water and salt stress is needed for efficient water management and precision irrigation in water scarce regions. However, few studies were examined on alfalfa water use and its components under water and salt stress. We carried out two field experiments to quantify alfalfa water use through setting up different water and salt gradients, including two irrigation levels (full and deficit irrigation) and four soil salinity levels (0, 2‰, 4‰ and 6‰ salt of mass ratio) in an arid region of Northwest China. Electrical conductivity of soil saturation extract (ECe), soil water content (SWC), leaf area index (LAI) and soil evaporation (E) were measured. The SIMDualKc model, which uses the FAO56 dual Kc approach, was calibrated and validated using measured SWC and E. Model results show a good agreement between observed and simulated SWC and E without stress. The depletion fraction for no stress (p) and the percent yield reduction per unit increase in soil salinity (b) were 0.50 and 6.0%/(dS m−1), respectively, slightly lower than those of FAO-56 (0.55 and 7.3%/(dS m−1)). The difference indicates that alfalfa has a lower capacity of water use but a greater tolerance to salt stress after soil salinity reached its sensitivity threshold in the arid region. The model performed a reduced accuracy under water and salt stress and the differences tended to increase as stress increased, which was partly attributed to constant yield response factor (Ky) under different soil water and salt stress. The key parameter Ky dynamically increased with the increased degree of stress. Compared to constant Ky, the simulations of SWC and E showed improved accuracy with dynamic Ky. These results suggested that the response and acclimation of alfalfa to stress might be incorporated into the dual Kc model through the diversity of Ky.