This study evaluates the technical efficiency (TE) of modern and traditional irrigation methods and their subsequent impact on farm productivity, profitability, and sustainability. The research uses a sample of 540 smallholder farmers from water stress region of northern Tanzania. The study reveals significant differences between adopters of modern irrigation techniques (MITs) and non-adopters using furrow irrigation: tomato yield was 732.94 kg vs. 387.35 kg, onion yield was 2952.57 kg vs. 395.53 kg, and pepper yield was 552.34 kg vs. 505.02 kg; input usage also varied, with adopters using 1.58 vs. 1.38 acres (tomatoes), 1.30 vs. 1.50 acres (onions), and 1.56 vs. 1.18 acres (peppers), as well as differences in seed, fertilizer, and agrochemical quantities. Using Stochastic Frontier Analysis (SFA), this study estimated the technical efficiency scores for farmers, the findings reveal that land cultivated (β1=0.537, p=0.000) and fertilizer use (β3=0.353, p=0.000) were significant drivers of productivity, indicating that increasing these inputs substantially boosts agricultural output. In contrast, herbicide use negatively impacts productivity (β6=−0.268, p=0.005), suggesting a need for more efficient or reduced usage of herbicides. The inefficiency effects model highlights that farming experience (δ2=10.53, p=0.012) positively influences technical efficiency, underscoring the value of practical expertise in optimizing resource use. The technical efficiency of the farmers varies widely, with a mean of 88.43%, a minimum of 45.28%, and a maximum of nearly 100%, suggesting room for improvement in less efficient operations. The analysis of technical efficiency across irrigation methods shows a significant advantage for modern irrigation techniques over furrow irrigation. For onions, sprinkler irrigation achieved a mean technical efficiency of 0.928 (p=0.000) compared to 0.589 under furrow irrigation. Similarly, for tomatoes, drip irrigation resulted in a mean efficiency of 0.850, substantially higher than 0.430 for furrow irrigation (p=0.000). For peppers, drip irrigation also outperformed furrow irrigation with mean efficiencies of 0.813 and 0.338, respectively (p=0.000). The study also revealed that while traditional irrigation methods had lower efficiency scores, proper management of resources such as fertilizers and pest control was crucial in mitigating inefficiency. The results highlight the importance of efficient farm management practices, including the use of appropriate technologies and optimized resource allocation, in achieving higher technical efficiency. The study recommends targeted subsidies, capacity-building programs, improved infrastructure, and public-private partnerships to promote the adoption of modern irrigation technologies among smallholder farmers.