Frequent soil cultivation in intensive vegetable production is detrimental to soil quality. Combining several sustainable management techniques, such as increasing organic matter input and plant diversity, and reducing soil cultivation, could benefit biological soil quality. We designed a crop rotation with a system approach, combining plant-based fertilisers, cover crops and reduced tillage, while growing more crops (sustainable intensification, SI). We compared this approach to common practice (CP), where animal manure fertilisers, no cover crops and ploughing were employed in a standard organic crop rotation on sandy loam in Denmark. Treatments were initiated in 2017, and two sets of contrasts, each comparing across cropping systems and specific crop rotations, were investigated in the second and third year of implementation: lettuce-leek double-cropping (SI) vs. leek sole-cropping (CP), and onion-lettuce intercropping (SI) vs. lettuce-lettuce double-cropping (CP). Soil microbial activity was assessed by β-glucosidase and dehydrogenase activity and potential N mineralisation over 28-days incubation. Root growth was investigated using minirhizotrons. The risk of N leaching was estimated from soil mineral N content at 0–2.5 m depth in autumn. β-glucosidase and dehydrogenase activity increased by 27–107% under SI compared to CP in the third year after implementation. SI improved potential N mineralisation by 12–52 kg N ha−1 before and after spring fertilisation both years. Increased soil fertility under SI contributed to 1.3 to 2.3 times higher plant N uptake (except for lettuce/onion first year), and 1 to 2.7 times higher marketable yields, but only minimally affected root depth. Despite higher N fertilisation, risk of N leaching did not rise under SI. The beneficial effects of SI were attributed to the combination of higher N fertilisation (53–144 kg N ha−1 more) as organic matter addition (2–3 Mg carbon ha−1 more), growing cover crops, and reducing soil tillage. Combining these techniques is promising for improving soil microbial activity in a sustainable way for highly intensive organic vegetable production.