The introduction of new tillage practices and intensive cropping practices have presented problems for pasture-ley systems in southeastern Australia. In an experiment on a sandy clay loam (Palexeralf) in Victoria, wheat ( Triticum aestivum L.) was grown for three seasons following a long-term pasture of subterranean clover ( Trifolium subterraneum L.) and, after the wheat, clover was re-established. The site was strongly acidic, and the wheat was established with either conventional cultivation or direct-drill methods and the soil was either limed or not. Liming the soil raised the pH with the cultivated soil through the depth of cultivation, but with the direct-drill treatment the pH was only raised in the surface 5 cm. Cultivation of the soil resulted in lower total nitrogen and organic carbon compared with the direct-drill treatment. Substantial wheat grain yield increases were obtained where the soil was limed, particularly with the thorough incorporation obtained where the soil was cultivated. In the 3 years of wheat, the increases with lime were 59%, 93%, and 98%, respectively, with cultivation and 34%, 59%, and 29% with the direct-drilled crop. The grain yields were maintained or increased over the seasons. With the unlimed and cultivation treatment, however, the yield decreased with time. The growth of subterranean clover also was increased by lime, with 39% and 116% more herbage in the two seasons where clover was grown. Where the direct-drill sowing method was used throughout the rotation the yield of the clover was further increased by 62% and 15%, respectively, in the two seasons. We postulate that the soil where the direct-drill method was used had less plant available Mn 2+. Neither the method of sowing the clover seed (direct sown or undersown) nor inoculation of the clover seed had any affect on the herbage yield of the clover. In both seasons there was an excellent germination and establishment of the clover. At this site potential problems associated with N fertility, soil structure and soil acidity have been identified, and each of these problems has to be addressed before the clover-ley farming system is operating to near its potential.