Degradation of soil structure can lead to increased risk of run-off and soil erosion, and therefore, it is necessary to implement management practices that are more sustainable and will enhance and rehabilitate soils while increasing food production. The impact of small-grain rotations grown with legumes, fallow and continuously on total C (CT), labile C (CL), non-labile C (CNL), total N (NT), aggregation expressed as mean weight diameter (MWD) and infiltration determined as unsaturated hydraulic conductivity (Kunsat) were examined in a long-term rotation trial established in 1966 on a Black Earth ('Pellic Vertisol') and a Red Clay ('Chromic Vertisol') soil near Tamworth, in New South Wales, Australia. The results were compared with an adjacent uncropped pasture on each soil type. Cropping reduced all C fractions, NT, MWD and Kunsat on both soils, which were further degraded when long fallowing was included in the rotation. CL decreased by 70% with long fallow in the Red Clay and by 78% in the Black Earth compared with the adjacent pasture, whileMWDdecreased by 61% in the Red Clay and 91% in the Black Earth. Rotation of cereals with legumes resulted in smaller decreases in C fractions, NT, MWD and Kunsat when compared with pasture. Rotation with lucerne ('Medicago sativa') resulted in 41% higher CL, 45% higherMWDand 87% higher Kunsat (10 mmtension) than long fallow on the Red Clay soil and 65, 126 and 43% higher on the Black Earth soil. There were strong positive correlations of soil C fractions and NT with MWD for both soil types. Similar significant relationships were found for all C fractions and NT with Kunsat (10mm tension) for the Red Clay soil, but not for the Black Earth. Rotations with forage legumes can limit declines in C fractions, NT, MWD and Kunsat when cropping these soils and has potential to increase soil sustainability.