The main objective of this study is to estimate the total economic loss due to inefficient use of irrigation water in Tunisia. Several approaches have been used for this purpose. The optimal level of water application for different crops is calculated using the actual crop evapotranspiration which is based on FAO-56 method. The residual imputation and yield comparison methods have been used to estimate the economic value of irrigation water for different irrigated crops in different bioclimatic areas. For the empirical analysis, primary data were obtained from a series of surveys that covered 78% of the total irrigated areas and were collected within the framework of the BVirtual Water and Food Security in Tunisia project^ (2013–2015). Secondary data about land distribution of crops in Tunisia were taken from the Ministry of Agriculture (2016). Around 724 farms were randomly sampled considering their bioclimatic area, farm type, and production system. The survey included the main 20 crops produced in Tunisia. Results show that most of farmers are either under or over utilizing irrigation water. The value of total direct economic losses, at the country level, of both types of water inefficiencies, was estimated to around 470 million Tunisian Dinars. Therefore, an improvement of water use efficiency at field level through dissemination of information/knowledge on irrigation scheduling and crop water requirements by extension services to farmers is needed to reduce this huge economic loss, reach higher sustainability in water use and improve food security.