A field experiment was conducted to test the effect of mulched drip irrigation under water deficit regulation on the physiological indexes, yield and water use in the Hexi region, which would provide theoretical guidance for efficient high efficiency water saving. We used experiments with Isatis indigotica in different amounts of irrigation and growth stages in the Yimin Irrigation District of Gansu Province in 2016. With seedling stage and fleshy root maturity stage under normal water conditions, we measured the physiological indexes yield and water use under mild, moderate and severe water deficit treatments in the vegetative and fleshy root growth stages. The leaf photosynthetic rate (P_n), leaf area index, plant height and root length of I. indigotica were significantly reduced by water deficit regulation in the vegetative and fleshy root growth stages, with greater decrease with aggravated water deficit degree, but the difference with mild water deficit treatments was not significant. The yield and water use efficiency of I. indigotica root with mild water deficit treatment were 8 239.56 kg∙hm^-2 and 24.11 kg∙hm^-2·mm^-1, respectively. With other water deficit treatments reduced, there were significant differences between the control group (P<0.05), severe water deficit treatment being the lowest. Thus, optimal water regulation is mild water-deficit treatment of vegetative and fleshy root growth stages to reduce water consumption, and improving the efficiency of water use does not reduce its production.