Remotely sensed canopy temperature from infrared thermometer (IRT) sensors is an effective tool for detecting plant water stress. Deficit irrigation, where the plants receive less than full irrigations and come under water stress at certain growth stages, can be used to help alleviate water shortage in the San Joaquin Valley of California. Thus, new irrigation scheduling procedures need to be developed. A field study was conducted from 2009 to 2011 to evaluate the performance of using midday infrared canopy to air temperature difference (ΔT) to manage postharvest deficit irrigation of early season peach trees. Threshold values of ΔT were selected, based on previous years’ stem water potential and ΔT measurements, for four irrigation treatments: Furrow and surface drip irrigation with or without postharvest water stress. A wired network of 12 IRT sensors was installed above the orchard for canopy temperature measurement. Soil water content and stem water potential were also monitored weekly for each treatment. In both growing seasons (2009–2010 and 2010–2011), the measured ΔT values showed consistent differences among treatments, which correlated to both soil water content (R2 ≈ 0.47–0.53) and stem water potential readings (R2 ≈ 0.46–0.65). The relationship between fruit mass and postharvest irrigation amount indicated that up to 53% water savings could be achieved without impacting fruit size. The study demonstrated that infrared canopy temperature measured from above the tree top can potentially be used for managing deficit irrigation in peach and possibly other tree crops. Additional research is needed to further validate this approach.