Scarcity of freshwater resource threatens sustainable agricultural production in arid and semi-arid regions of Ethiopia. Therefore improved irrigation technologies needed to be developed for water saving and increase productivity per unit of water. Deficit irrigation is a recent innovative approach of water-saving method that reduces irrigation amounts and maximizes water productivity. The field experiment on tomato crop was undertaken at Arba Minch, South Nations, Nationalities and Peoples Region of Ethiopia. The objectives of the study were assessing the impact of deficit irrigation at different growth stages on the phenology, crop yield, and water productivity, and identifying the sensitive crop growth stage of tomato to waters stress. The result of the study shows a highly significant difference (P ≤ 0.05) among treatments for phenology, yield and yield components, and Water use efficiency. The highest fruit yield (64.65ton/ha) was obtained from the control treatment which was not significantly different from treatment with 65%ETc applied at stage I (63.28 tons/ha). The highest crop water use efficiency 18.78kg/m3 and gross benefit 646073.04 Birr/ha were gained from treatment with the application of 65% of ETc during the vegetative stage. On the other hand, the crop yield response factor shows that the flowering and fruit development stage was highly sensitive to water stress. Whereas, the sensitivity of the vegetative growth stage to water stress was minimum. This shows that applying deficit irrigation at the flowering and fruit development stage results in a potential yield reduction and deficit irrigation at this stage is not recommended. The application of 65% ETc deficit irrigation during the vegetative stage can solve the water shortage problem without significant yield reduction.