In agriculture, use of sensors and controllers to apply only the quantity of water required, where and when it is needed (i.e., precision irrigation), is growing in importance. The goal of this study was to generate relatively homogeneous management zones and determine optimal placement of just a few sensors within each management zone so that reliable estimation of plant water status could be obtained to implement precision irrigation in a 2.0 ha almond orchard located in California, USA. First Fuzzy C-means algorithm was used to create management zones using stable soil properties.  Following the creation of management zones, a slightly modified Fuzzy C-Means algorithm was used to choose the best places to locate the leaf monitors, a specially developed sensor to detect plant water status, in the field. The methodology and algorithm allowed not only the generation of efficient management zones based on soil and plant characteristics, but also the placement of a limited number of sensors within each management zone to capture spatial variability in plant water status. The algorithm can also be helpful in placement of proximal sensors in field crops.