A field experiment conducted at the Regional Agricultural Research Station, Raichur (Karnataka) during summer 2005 revealed that, the total water requirements for tomato under nethouse conditions using 60, 80, 100 and 120% evapotranspiration (ET) levels of drip irrigation were 52.720, 61.451, 69.607 and 79.524 L per plant respectively. The  mean application  efficiency of the system was 91.75%, while the mean distribution efficiency was  94.27%.  Among  the  nutrient sources, the  farmyard  manure (FYM) treatment gave the maximum water use efficiency (WUE) of 10.40 t ha.cm-1 and the lowest was obtained in case of chemical fertilizers (9.12 t ha.cm-1). Within the drip  irrigation treatments, the highest WUE of 11.90 t ha.cm-1 was obtained under the treatment of irrigation at 60% and the least in 120% ET (7.45 t ha.cm-1). The study showed that the maximum net return of Rs. 3,62,016 per ha could be obtained by the application of FYM using drip irrigation at 100% ET with a benefit-cost (BC) ratio of 5.19.  However, where the availability of FYM is limited, vermicompost with 100% ET could be applied to obtain a net return of Rs. 3,45,808 with a BC ratio of 4.98.  In water scarcity areas and where the land availability is not a constraint, drip irrigation at 60% ET could be resorted to as it would command an additional area of 0.32 ha (using the same quantity of water consumed in 100% ET per ha) and fetch an increased net return of Rs. 42,559 per ha. The payback period of the investment in nethouse cultivation of tomato using drip irrigation was found out to be one and a half years (three seasons) by which time the system became beneficial.