In arid regions, water and nitrogen are the two most limiting factors for sustainable pastoral production systems. In this study, we determined the potential effects of irrigation and nitrogen application on forage yield, nutritive values, and resource use efficiency of alfalfa in arid agro-climatic conditions. Field experiments were carried out using three irrigation regimes (W1, 300; W2, 450; and W3, 600 mm) and three nitrogen application rates (N1, 150; N2, 225; and N3, 300 Kg N ha−1). Alfalfa seeds were sown in fall 2014, uniformly managed for crop establishment, and subjected to different treatments in spring 2015–2016. Results indicated that irrigation, nitrogen, and their interaction (W × N) significantly (P ≤ 0.05) affected alfalfa forage yield, quality, irrigation water use efficiency (IWUE), and nitrogen use efficiency (NUE). Forage yield followed an increasing trend with increasing the irrigation amount at each harvest in both growing seasons. However, crude protein (CP), relative feed values (RFV), and IWUE were significantly decreased while neutral detergent fiber (NDF) and acid detergent fiber (ADF) contents were increased at the high irrigation level (W3). The maximum forage yield was achieved with W3 treatment (25.9 and 23.1 t ha−1), followed by W2 (25.8 and 21.7 t ha−1) in 2015 and 2016. In both years, the highest IWUE (57.3 and 48.2 kg mm−1), CP (16.1 % and 17.7 %), and RFV (197.1 % and 186.2 %) values were achieved with W2 treatment. Moreover, increasing N application resulted in a linear decline in alfalfa forage yield, nutritive quality, and resource use efficiency. The maximum forage yield (24.4 and 21.2 t ha−1), CP (15.5 % and 16.4 %), RFV (210.3 % and 198.8 %), IWUE (54.3 and 47.0 kg mm−1), and NUE (169.9 and 141.2 kg kg−1), and lower ADF (25.7 % and 24.9 %) and NDF (31.0 % and 33.1 %) was obtained with application of 150 kg N ha−1 in 2015 and 2016. The regression equations of irrigation and nitrogen application indicated a quadratic relationship between yield and forage nutritive values. Overall, 450 mm irrigation coupled with 150 kg N ha−1 (W2N1) showed the most promising effects in terms of achieving optimal forage yield consistent with enhanced forage nutritive values, and greater resource use efficiency of alfalfa in the arid region of North China.