Alfalfa is an important forage crop that is moderately tolerant to salinity; however, little is known about its salt-tolerance mechanisms. We studied root and leaf transcriptomes of a salt-tolerant (G03) and a salt-sensitive (G09) genotype, irrigated with waters of low and high salinities. RNA sequencing led to 1.73 billion high-quality reads that were assembled into 418,480 unigenes; 35% of which were assigned to 57 Gene Ontology annotations. The unigenes were assigned to pathway databases for understanding high-level functions. The comparison of two genotypes suggested that the low salt tolerance index for transpiration rate and stomatal conductance of G03 compared to G09 may be due to its reduced salt uptake under salinity. The differences in shoot biomass between the salt-tolerant and salt-sensitive lines were explained by their differential expressions of genes regulating shoot number. Differentially expressed genes involved in hormone-, calcium-, and redox-signaling, showed treatment- and genotype-specific differences and led to the identification of various candidate genes involved in salinity stress, which can be investigated further to improve salinity tolerance in alfalfa. Validation of RNA-seq results using qRT-PCR displayed a high level of consistency between the two experiments. This study provides valuable insight into the molecular mechanisms regulating salt tolerance in alfalfa.