Abstract: To address the critical issues of water scarcity and the uneven spatiotemporal distribution of precipitation in the Guanzhong Plain of Shaanxi Province, which significantly constrain crop growth, this study investigates the optimal irrigation levels and ground mulching management strategies for kiwifruit cultivation in the region. Using the 'Xuxiang' kiwifruit cultivar as the experimental subject, the research employed three irrigation gradients: normal irrigation (W1, with an upper limit of 85% θf, where θf represents field capacity), mild deficit irrigation (W2, 75% of W1), and severe deficit irrigation (W3, 60% of W1). Additionally, four ground cover treatments were implemented: a dual cover combination of intra-row horticultural fabric (F) with inter-row grass mulching (G) (FG), only intra-row horticultural fabric mulching (F) with inter-row clean tillage (N) (FN), only inter-row grass mulching (G) with intra-row clean tillage (G) (NG), the clean tillage combination (NN) of intra-row and inter-row bare land was used as control, in a total of 12 experimental treatments. A two-year field experiment, the study systematically evaluated the effects of these treatments on soil water storage within and between rows, as well as on kiwifruit growth, yield, and quality parameters. The findings demonstrated that ground cover (F) significantly enhanced in-row soil water storage under the W1 irrigation regime, while grass cover (G) markedly improved inter-row water storage under the W2 treatment (P < 0.05). Compared to the NN treatment, the FG treatment not only maintained inter-row soil water storage but also increased in-row water storage by 2.21–42.23 mm. Furthermore, the W2 and FG treatments significantly elevated the net photosynthetic rate (Pn), transpiration rate (Tr), and stomatal conductance (Gs) during the fruit expansion to maturation stages, while reducing the intercellular CO₂ concentration (Ci) in leaves. In comparison to the NNW3 treatment, the FGW2 treatment significantly improved single fruit weight (30.38%), yield per plant (76.38%), soluble sugar content (15.15%), and soluble solid content (44.36%) (P < 0.05). Relative to the NNW1 treatment, the FGW1 treatment reduced organic acid content by 19.70% and increased the solid-to-acid ratio by 37.75%. The study also revealed that variations in leaf Pn during the early growth stages under mulching and deficit irrigation treatments had a pronounced impact on fruit quality formation, whereas increases in leaf Pn during the later growth stages were more conducive to yield enhancement. The combined effects of different ground mulching methods and irrigation levels improved soil water storage during critical growth periods, thereby enhancing leaf photosynthetic efficiency and ultimately improving kiwifruit yield and quality. Notably, soil water storage during the fruit expansion period exhibited the strongest correlation with kiwifruit growth, yield, and quality, identifying this stage as the most water-sensitive phase for kiwifruit cultivation. In conclusion, the adoption of dual during (FG) and mild deficit irrigation (W2) in the Guanzhong region can effectively enhance soil water storage and photosynthetic performance across various growth stages, ensuring optimal yield and fruit quality. These findings provide scientifically validated and practical measures for sustainable kiwifruit production in water-limited environments.