Improving the efficiency of water consumption and water productivity is the key approach to satisfy sustainable water resource supply and food demand. As effective measures, water saving practices are implemented in arid and semi-arid regions. For areas with shallow groundwater, water used for irrigation is not entirely consumptively used. The majority of irrigation water infiltrations below the root zone are stored in shallow groundwater. This can be reused as groundwater based evapotranspiration (ETg) at the regional scale. Thus, actual regional efficiency of water consumption (REWC) based on all water within the hydrological system is greater than based on consumptive use only. Accurately evaluating the response of REWC and regional water productivity (RWP) to water saving practices is essential due to the complexity of the hydrological system. In this study, regional ETg and regional evapotranspiration (ET) of the past 20 years were reproduced in a typical arid irrigation district with shallow groundwater based on the water balance method. Furthermore, REWC and RWP were estimated to investigate the impact of water saving practices to regional water use. Simulation results show that groundwater is a significant water source of regional ET in arid regions with a shallow aquifer and contributes more than 16% of regional ET for the irrigation district. Water saving practice implementation enhances the contribution of groundwater to ET. After water saving practices implementation, annual REWC and RWP have been improved by 0.07 and 0.1 kg/m3, respectively. Furthermore, negative correlation between REWC and I + P (the total water supply including rainfall and irrigation water diversion) and positive correlation between RWP and REWC demonstrate that water saving practices can reduce the non-beneficial water losses by evaporation and enhance productivity by a lower groundwater table. Overall, shallow groundwater plays an important role to enhance REWC and RWP and the contribution of groundwater to regional water use needs to be considered as part of a reasonable water saving strategy towards a sustainable agricultural system.