Saline soils limit plant growth due to high salinity. Straw returning has proven effective in enhancing soil adaptability and agricultural stability on saline lands. This study evaluates the effects of different straw-returning methods—straw mulching (SM), straw incorporation (SI), and straw biochar (BC)—on soil nutrients, water dynamics, and salinity in a barley–cotton rotation system using field box experiments. SM improved soil water retention during barley’s jointing and heading stages, while SI was more effective in its filling and maturation stages. BC showed lesser water storage capacity. During cotton’s growth, SI enhanced early-stage water retention, and SM benefited the flowering and boll opening stages. Grey relational analysis pinpointed significant water relationships at 10 cm and 20 cm soil depths, with SM regulating water across layers. SM and BC notably reduced soil conductivity, primarily within the top 20 cm, and their effectiveness decreased with depth. SI significantly lowered soil conductivity at barley’s jointing stage. SM effectively reduced salinity at 10 cm and 20 cm soil depths, whereas BC decreased soil conductivity throughout barley’s jointing, filling, and heading stages. For cotton, SI lowered soil conductivity at the seedling and boll opening stages. SM consistently reduced salinity across all stages, and BC decreased conductivity in the top 30 cm of soil during all growth stages. Both SM and BC significantly enhanced the total nutrient availability for barley and cotton, especially improving soil organic carbon and available potassium, with BC showing notable improvements. At barley’s heading stage, SI maximized dry matter accumulation, while SM boosted accumulation in leaves, stems, and spikes during the filling and maturation stages. Straw returning increased barley yield, particularly with SM and BC, and improved water use efficiency by 11.60% and 5.74%, respectively. For cotton, straw returning significantly boosted yield and water use efficiency, especially with SI and SM treatments, enhancing the total bolls and yield. In conclusion, straw returning effectively improves saline soils, enhances fertility, boosts crop yields, and supports sustainable agriculture. These results provide a robust scientific foundation for adopting efficient soil improvement strategies on saline lands, with significant theoretical and practical implications for increasing agricultural productivity and crop resilience to salt stress.