To obtain a greater yield per unit rainfall is one of the most important challenges in dryland wheat production. Highly efficient use of limited water may be one means of achieving this goal. This paper reviewed wheat physiological adaptation and benefits associated with water deficit and variable conditions. In addition, it reveals the compensatory effect of limited irrigation and fertilizer supplement on wheat water-use efficiency (WUE) and highlights the breeding of new varieties for high WUE that could improve wheat productivity under water-limited environments in the semiarid area. Considerable potential for further improvement in wheat productivity in semiarid area seems to depend on effective conservation of moisture and efficient use of this limited water. Different crops, soil and water management strategies should be adjusted according to the conditions that prevail in the various semiarid areas. By combining soil and water conservation approaches with regulating the cropping system by cultivating drought-tolerant and water-saving cultivars, the increase in wheat productivity could be achieved.