| Summary: | Large-scale burning of rice straw causes air pollution and deterioration of soil health, which challenges the sustainability of the rice–wheat system (RWS) in north-western India. In a field experiment on sandy loam (<i>Typic Ustochrept</i>) soil at Punjab Agricultural University, India, with split plot design, effects of four nitrogen (N) levels (0, 90, 120, and 150 kg N ha<sup>−1</sup>) in main plots and four levels of rice straw (RS) incorporation (0, 5, 7.5, and 10 Mg ha<sup>−1</sup>) in wheat in sub-plots were studied after 7 years on carbon (C) pools at maximum tillering (MT) and flowering (FL) stages of wheat and crop yields. Rice straw (RS) incorporation at 10 Mg ha<sup>−1</sup> with N application at 120 kg N ha<sup>−1</sup> in wheat not only increased labile C pools significantly especially at MT but also increased the wheat yield compared with no straw incorporation. Principal component analysis suggests that total polysaccharide carbon, basal soil respiration, and pH can be used as sensitive parameters for assessing soil quality in RWS.
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