Summer peanut – winter wheat is considered a feasible alternative to the traditional summer maize – winter wheat on the North China Plain, and it has great potential to maintain crop yield and reduce environmental costs. However, the yield, water consumption, and nitrogen utilization of subsequent wheat responses to peanut residue incorporation are not well-documented. Thus, a two-year field experiment with peanut root, shoot, and total residue incorporations, as well as a control with no residue, was established for the summer peanut – winter wheat cropping system. Peanut residue incorporation had no significant yield benefits for subsequent wheat and subsequent peanut, compared with no peanut residue input. The wheat yield was positively correlated with previous peanut yield, due to complementary utilization of residual nitrogen and water resources. Therefore, residue incorporation increased the annual yield of the summer peanut – winter wheat system by 5–13%, decreased the annual evapotranspiration by 3–12%, and boosted annual water use efficiency by 8–26%. Yield increases caused by peanut residue incorporation were detected only from the perspective of multiple cropping systems rather than single crop seasons. This indicated that at least two crop seasons were needed to verify the effects of residue incorporation on the North China Plain. Remarkably, no significant differences in yield, nitrogen yield, or wheat equivalent yield were detected between root and total residue incorporations. This clearly indicates that shoot removal has a negligible effect on the annual crop yield and performance of the summer peanut – winter wheat system. In conclusion, the yield benefits of legume residue incorporation are mainly attributed to the belowground residue, and the benefits may be underestimated when only one crop season after residue retention was investigated.