Intercropping orchards with cover crops is an important practice for achieving sustainable soil management. However, little research has addressed the development of a soil quality index (SQI) to evaluate cover crop effects on orchard soil quality. The aim of this study was to ascertain whether cover cropping improves soil quality and fruit yield of Goji (Lycium barbarum L.) while reducing or replacing organic fertilizer application. The main treatments were the traditional management of L. barbarum as a monocrop (M) and intercropping Goji with radish (Raphanus sativus L.) as an annual cover crop (I). Within the main treatments, different levels of organic fertilizer were applied at 0 kg·plant−1 (M0), 2 kg·plant−1 (M1), and 4 kg·plant−1 (M2). After six years of planting, we analyzed the changes in soil quality caused by cover cropping with different organic fertilizer levels based on the SQI method. Goji yields were used for validation of the SQI derived from a minimum data set of soil quality indicators. In contrast with traditional monocropping, cover cropping increased soil total nitrogen, available nitrogen, and available phosphorus contents (by 78.60%, 30.30%, and 138.08%, respectively). There were also increased microbial biomass carbon and nitrogen contents (by 79.01% and 184.01%, respectively), enhanced urease and sucrase activities (by 41.02% and 56.81%, respectively), and reduced bulk density (by 1.92%) in the soil as a result of cover cropping. Compared with IM0 treatment, soil microbial biomass carbon and nitrogen contents considerably increased under IM1 treatment, whereas soil available nitrogen and potassium contents as well as electrical conductivity increased under IM2 treatment. The SQI, which varied among treatments in the order IM1 > IM2 > MM2 > MM1 > IM0 > MM0, was positively correlated with Goji yield. From the soil quality and Goji yield perspective, cover cropping with a medium level of organic fertilizer is the optimal soil management practice for the L. barbarum planting system in arid areas of Ningxia, Northwest China.