A long-term field experiment was set up in 1981 in north-eastern Victoria to determine the effects of conservation tillage farming on agronomic and soil properties. Conventional cultivation was compared with direct drilling, and stubbles retained from the previous crop were compared with burning under direct drilling. Wheat was grown continuously over the 7 years of the experiment. Organic carbon (C), total nitrogen (N), soil microbial biomass and earthworm populations were measured. When samples were taken incrementally down the soil profile, there was a significant concentration gradient of organic matter under direct drilling. In the surface 2.5 cm, biomass C and N, and N mineralisation were 35, 30 and 62% greater, respectively, than under conventional cultivation. Direct drilling into retained stubble did not significantly increase organic C or total N. Of the estimated 7.8 t C/ha added to the soil from conserved crop stubbles, 4% was retained in the top 7.5 cm at the time of sampling. Organic C, total N and biomass C and N decreased with depth in both treatments. Microbial biomass varied considerably with season. The biomass of earthworms in the top 10 cm, under direct drilling, was more than twice that of conventional cultivation, while total worm numbers increased significantly (P<0.05), from 123 to 275/m2, when wheat stubble was retained with direct drilling compared to stubble burning.