Graded-terraced field-size watersheds have been cropped in a dryland wheat - fallow - sorghum - fallow (2 crops in 3 years) sequence with no-till and conventional (stubble-mulch) tillage systems at Bushland, Texas since 1982. No-till had little effect on wheat yields but increased sorghum yields 14% due to reduced evaporation, as a result of surface residue. No-till reduced erosion by 66%; however, soil loss with conventional tillage was also low due to terracing and contouring. NPK loss was very low. Economically, no-till performed very well, due mainly to reduced equipment inventories and lower operating costs. No-till gave increased storm runoff due to soil crusting, and there were problems with grass weeds. A system consisting of successive no-tillage and stubble-mulch tillage is proposed.