Banana yield and quality in Malawi is low due to drought, low fertility and poor management practices. Therefore, a comparative researcher-managed and farmer-managed irriagated banana study was initiated in 2004/2005 to develop guidelines and promote banana irrigation optimisation for small-scale farmers. Specifically, the research aimed to determine and compare researcher-managed and farmer-managed optimum irrigation in respect to banana yield, quality, income and gross margins, and facilitate transfer of banana irrigation technology to farmers. Irrigation treatments ranged from 0, 50 and 100% evapotranspiration (ET) of estimated banana ET, laid out in a randomized complete block design (RCBD) with four replicates. Irrigation was scheduled using the soil moisture balance system. The results of banana production and gross margin analysis for both researcher-managed and farmer-managed experiments showed that average yield and quality increased linearly with increasing irrigation. Highly significant differences (P < 0.001) were observed between amounts of applied water in average bunch weight, average hand weight and average finger weight per hectare both under researcher-managed and farmer-managed fields, respectively. The gross margin analysis showed negative gross margin under non-irrigated banana enterprise and positive gross margin at 100% ET for both researcher-and farmer-managed fields, respectively. Irrigation raised farmer earnings from -4 to 27 US$/day (non-irrigated to irrigated banana) and it was optimal to produce banana under 100% ET. The findings showed that banana enterprise has a commercial orientation that can reduce poverty for smallholder farmers. It is recommendable that Malawi and other countries should advocate banana irrigation agribusiness because it can facilitate the attainment of food security and poverty reduction. Key words: Irrigation scheduling, evapotranspiration, gross margin, banana.