Dryland wheat ( Triticum aestivum L.) and grain sorghum ( Sorghum bicolor (L.) Moench) are often grown using a wheat–sorghum-fallow (WSF) crop rotation on the semiarid North American Great Plains. Precipitation stored during fallow as soil water is crucial to the success of the WSF rotation. Stubble mulch-tillage (SM) and no-tillage (NT) residue management practices reduce evaporation, but the sparse residue cover produced by dryland crops, particularly sorghum, is insufficient to reduce soil crusting and runoff. Subsoil tillage practices, e.g., paratill (PT) or sweep (ST), fracture infiltration limiting soil layers and, when used with residue management practices, may increase soil-water storage and crop growth. Our objectives were to compare the effects of PT to 0.35 m or ST to 0.10 m treatments on soil cone penetration resistance, soil-water storage, and dryland crop yield with NT and SM residue management. Six contour-farmed level-terraced watersheds with a Pullman clay loam (US soil taxonomy: fine, mixed, superactive, thermic Torrertic Paleustoll; FAO: Kastanozems) at the USDA—Agricultural Research Service, Conservation and Production Research Laboratory, Bushland, TX, USA (35°11′N, 102°5′W) were cropped as pairs using a WSF rotation so that each phase of the sequence appeared each year. In 1988, residue management plots received PT or ST every 3 years during fallow after sorghum resulting in five treatments: (i) NT–PT, (ii) NT–NOPT, (iii) NT–ST, (iv) SM–PT, and (v) SM–NOPT. Cone penetration resistance was the greatest in NT plots and reduced with PT after 12, 23, and 31 months. Mean 1990–1995 soil-water storage during fallow after wheat was greater with NT than with SM, but unaffected by PT or ST. Dryland wheat and sorghum grain yields, total water use, and water use efficiency (WUE) were not consistently increased with NT, however, and unaffected by PT or ST tillage. We conclude, for a dryland WSF rotation, that: (1) NT increased mean soil-water storage during fallow after wheat compared to SM, and (2) ST and PT “subsoil” tillage of a Pullman did not increase water storage or yield. Therefore, NT residue management was more beneficial for dryland crop production than subsoil tillage.