In many areas of the world, water shortages prevail and threaten food production. Deficit irrigation was commonly investigated in dry areas as a precious and sustainable production approach. Using the CropSyst model to simulate the effects of different deficit irrigation treatments could help draw conclusions and save time, effort, and money. Therefore, the aims of this research were (i) to calibrate and validate the CropSyst model for wheat under different sustained and phenological stage-based deficit irrigation treatments, (ii) to simulate the impacts of the latter treatments on limiting wheat yield reduction. Two field experiments were conducted in Nubaria (Egypt), representing an arid environment. They included seven irrigation treatments: (1) 100%, (2) 75%, or (3) 50% of crop evapotranspiration (ETc) during the whole crop cycle; (4) 50% ETc at tillering only, or (5) at booting only, or (6) at grain filling only, or (7) at both tillering and grain filling, with the replenishment of 100% ETc to the treatments (4) to (7) in the remaining phenological stages. The results revealed that phenological stage-based deficit irrigation of wheat resulted in lower yield reduction compared to sustained deficit irrigation treatments, with a 6% yield reduction when 50% ETc was applied at the booting stage. Wheat yield loss was reduced to 4 or 6% when 95 or 90% of ETc were applied, respectively. The CropSyst model accurately simulated wheat grain and total dry matter under deficit irrigation with low RMSE value. In conclusion, the CropSyst model can be reliably used for evaluating the strategy of planned deficit irrigation management in terms of wheat production under the arid environment.