Cover crops are widely used to increase soil organic carbon (SOC) stocks in agroecosystems. However, the effects of cover crops on the labile fractions and chemical composition of SOC, as well as the consequences for fruit yield in manure-applied orchards are still unclear. Here, we conducted two field experiments in an arid area of Northwest China to explore the responses of soil physicochemical properties, SOC characteristics, and wolfberry (Lycium barbarum L.) yield to cover cropping and manure application rate. Decomposed sheep manure was incorporated into the soil at 0, 6660, and 13,320 kg·hm–2 in the absence (wolfberry monocropping) and presence (cover cropping) of forage radish (Raphanus sativus L.). Lower soil bulk density and higher total nitrogen, available nitrogen, available potassium, and dissolved organic carbon contents were observed under cover cropping compared to monocropping (p < 0.05). The contents of SOC and its labile fractions showed the greatest response to cover cropping with medium manure rate, which resulted in the highest wolfberry yield. Solid-state 13C nuclear magnetic resonance analysis identified O-alkyl carbon (26.2–52.4%) as the dominant SOC functional group across all treatments, followed by alkyl carbon (15.9–34.5%) and aromatic carbon (9.7–35.2%). The relative abundance of alkyl carbon trended higher under cover cropping in Yinchuan (by 1.1%) and Zhongning (by 21.3%), whereas manure application rate did not affect the chemical composition of SOC. Structural equation modeling revealed that cover cropping contributed to wolfberry yield in manure-applied fields directly or indirectly by altering SOC composition and improving labile SOC accumulation as well as soil physicochemical properties. Findings of this study are helpful to enhance soil carbon management and wolfberry orchard productivity in arid areas.