A question of economic, social, and land-use importance in the predominantly steep South Island high country tussock grasslands of New Zealand is whether these lands can be sustainably farmed by oversowing introduced grasses and legumes and using fertilisers. To help answer this question, we compared vegetation and soil chemical, biochemical, and biological properties on Brown soils (Dystrudepts) on adjacent land areas which have been differently managed since 1978. One area had never been fertilised or oversown. The other had been oversown with grasses and clovers and received about 1100 kg/ha of sulfur-superphosphate between 1979 and 1997. Oversowing and fertilising reduced the amount of bare ground and transformed the vegetation to a species composition dominated by the introduced adventives Anthoxanthum odoratum and Agrostis capillaris. Fertilising raised soil carbon (C) and nitrogen (N) content, increased A-horizon thickness, and raised exchangeable cation values. All of the phosphorus (P) applied to the fertilised area was accounted for in the top 15 cm of soil, but has accumulated in the relatively unavailable organic form. Oversowing and fertilising significantly (P < 0 . 05) increased microbial biomass C, N, and P relative to values in unfertilised soils. The microbial biomass C: N and C: P ratios were significantly (P < 0 . 05) lower in fertilised soils. Fertilised soils had significantly more (P < 0 . 05) mineralised N than unfertilised soils. Populations of 5 groups of soil fauna (Scarabaeidae, nematodes, enchytraeids, rotifers, tardigrades) were higher in fertilised soils. Nematode species parasitic or pathogenic for clovers were present in greater numbers on fertilised soils. A combination of fertility decline (in particular, P immobilisation as organic P) and nematode damage may be the reason for the low clover cover on fertilised sites, and may explain the widely observed clover ‘flush’ and decline common to oversown high country. We conclude that there is no simple measure of ‘soil quality’ that can be used as a sustainability indicator in moist New Zealand high country. Nor can sustainability be judged purely on biological, biochemical, and chemical critieria. Although many of the effects associated with oversowing and fertilising, such as increased organic matter content of A horizons and increased biological activity, are positive, these effects must be balanced against the economic risk associated with being committed to a high-input farming system, the loss of low-producing but resilient native species, and increase of plant-pathogenic nematodes.