The impacts of fallow on soil fertility, crop production and climate-forcing gas emissions were determined in two contrasting legumes, Gliricidia sepium and Acacia colei, in comparison with traditional unamended fallow and continuous cultivation systems. After 2 years, the amount of foliar material produced did not differ between the two improved fallow species; however, grain yield was significantly elevated by 55% in the first and second cropping season after G. sepium compared with traditional fallow. By contrast, relative to the unamended fallow, a drop in grain yield was observed in the first cropping season after A. colei, followed by no improvement in the second. G. sepium had higher foliar N, K and Mg, while A. colei had lower foliar N but higher lignin and polyphenols. In the third year after fallow improvement, a simulated rainfall experiment was performed on soils to compare efflux of N2O and CO2. Improved fallow effects on soil nutrient composition and microbial activity were demonstrated through elevated N2O and CO2 efflux from soils in G. sepium fallows compared with other treatments. N2O emissions were around six times higher from this nitrogen-fixing soil treatment, evolving 69.9 ngN2O–N g1soil h1 after a simulated rainfall event, compared with only 8.5 and 4.8 ngN2O–N g1soil h1 from soil under traditional fallow and continuous cultivation, respectively. The findings indicate that selection of improved fallows for short-term fertility enhancement has implications for regional N2O emissions for dry land regions.