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Irrigation is vital for the sustainability of water‐limited agricultural areas. However, higher irrigation efficiency (IE) rarely reduces irrigation water consumption, a paradox well noted in the real world. Resolving this paradox requires rigorous assessment of basin‐scale IE, which remains rare. This study holistically analyzed basin‐scale IE using the Zhangye Basin (ZB), a typical agricultural area in arid northwestern China, as the testbed. A new basin‐scale IE index was proposed that factors in irrigation return flow and groundwater's direct contributions to crop evapotranspiration. A novel approach was also developed to calculate this new index based on integrated ecohydrological modeling. The major study findings for the ZB include the following. First, return flow accounts for approximately 13% of irrigation water, which creates a difference of 0.1 between the new basin‐scale IE index and a traditional field‐scale index. Second, although basin‐scale IE has notable interannual fluctuation, its multiyear average shows stability, which may be dependent on the basin's physical characteristics. Third, basin‐scale IE reflects large spatial heterogeneity and is influenced by the intensity of surface water‐groundwater interaction. Finally, under the projected future climate, return flow in the ZB will be enhanced by 3.2% per decade, and basin‐scale IE shows an increasing trend. Overall, rigorous evaluation of basin‐scale IE is critical to making heterogeneous policies and developing adaptive management strategies under the changing climate. The integrated modeling approach developed in this study provides a methodological foundation for overcoming misunderstandings about the IE paradox and benefits the reform of the current IE policy agenda. Key Points: A basin‐scale irrigation efficiency index was proposed to consider irrigation return flow and crop ET directly from groundwaterA novel approach was developed to assess basin‐scale irrigation efficiency based on integrated ecohydrological modelingThis study provides a methodological foundation for overcoming misunderstandings about the paradox of irrigation efficiency [ABSTRACT FROM AUTHOR]

• The return flow of high-latitude area located in the cold temperate zone of northern China is simulated. • The influence result of the field ridge layout and water inflow which impact on return flow is obtained. • Quantitative relationships between different types return flows and water inflow are established. • The research results in different climatic conditions are discussed. To study variations in the field return flow, a field water balance model was established according to the water balance principle, and the field return flow was simulated using system dynamics and tested with field-measured data collected in a trial district in the Hu Lanhe irrigation area in 2016. The main conclusions are as follows: trends of the simulated and measured field water storage and field runoff were consistent. The daily error range between the simulated and measured field water storage values was (−0.1996, 0.2034) mm, and the daily error range between the simulated and measured field runoff values was (−0.2183, 0.1853) mm. Comparison of the trends among the water inflow, the surface return flow, the underground return flow and the total return flow revealed that the greater the water inflow was, the more similar the trends of the surface return flow and total return flow were, with no obvious change in the underground return flow. The total return flow increased with increasing field ridge length and decreased with increasing field ridge height and width. The range of the return flow coefficient of irrigation in 2011˜2016 was (0.5825, 0.6395), and the range of the return flow coefficient of irrigation and precipitation was (0.2734, 0.3386); the impact of irrigation water on the return flow was greater than that of precipitation. The research results are significant to the evaluation and analysis of field return flow and the management of agricultural irrigation water and provide a comparative reference for the study of return water in other areas. [ABSTRACT FROM AUTHOR]