Soil water deficits in deep layers and early senescence are key but neglected issues under continuous monoculture cultivation, limiting crop production in water-limited environments, particularly for perennial crops with relatively high water demand. Whether annual forage crops with shallow roots can be incorporated into intercropping systems to effectively improve soil water distribution via water use compensation is unclear. A field trial with alfalfa and four annual forage crops (maize, sweet sorghum, Sudan grass and Japanese millet) was conducted in a typical semiarid region of the Loess Plateau. Compared with the alfalfa monoculture system, the alfalfa intercropping system with annual forage crops improved the water content of the topsoil (0-30 cm) and subsoil (30-160 cm) by 6.5 %-81.4 % and 10.7 %-23.2 %, respectively. Compared with the other intercropping systems, the alfalfa-maize system greatly reduced interspecific water competition in the subsoil by 16.4 %-27.6 % and increased topsoil water compensation by 0.3 %-13.1 %. This led to an average increase of 29.5 % in water storage in the topsoil and 12.0 % in water storage in the subsoil at the maturity stage. Compared with the alfalfa monoculture system, the alfalfa-maize, alfalfa-sorghum, alfalfa-Sudan grass, and alfalfa-Japanese millet intercropping systems presented 151 %, 44 %, 54 %, and 32 % greater water productivity, respectively. Notably, the improvement in soil water conditions within the intercropping system resulted in greater interspecific compensatory effects than selection effects, thereby conferring a yield advantage of 64.6 %-80.6 %. Moreover, compared with the other intercropping systems, the alfalfa-maize combination resulted in 0.5-7.6 % LER improvement, 13.8-28.8 % MAI enhancement, and 12.3-43.1 % CR reduction, coupled with water compensation benefits and favorable water productivity (WER > 1). Overall, the yield loss of alfalfa intercropped with annual forage crops can be effectively compensated for. This offers a feasible solution for efficient water management by facilitating even water use for perennial forage crops in semiarid regions.