Conservation tillage can reduce water and soil erosion and improve crop yields. It is a kind of sustainable farming system which is beneficial for the environment. Effects of conservation tillage on soil water dynamic and crop yield in a phased rotation systems with spring wheat and field pea were studied in dryland in the middle of the Loess Plateau, Dingxi, Gansu from 2002 to 2004. Results showed that conservation tillage increased soil water storage and soil moisture in 0～200 cm depth as the rainfall increased. This effect was more obvious on no-tillage with straw cover in the drier years, and on no-tillage with plastic mulch in the deep depth. The soil moisture at top soil varied greatly with precipitation and other climatic factors, whereas soil moisture in the deep soil was rather stable. Soil moisture was higher at seeding stage, 5-leave stage and harvesting, but lower at anthesis. In the current rotation system, soil moisture content of 0～50 cm was 28%、26% and 11%、23% higher on no-tillage with straw cover than conventional tillage for spring wheat and field pea respectively. As the result, the precipitation productive efficiency on no-tillage with straw cover increased by 17.79%～26.81% compared with conventional tillage. In the current spring wheat and field pea rotation system, the combined crop yields reached 3 420 kg/hm² and water use efficiency 8.11 kg/(hm²•mm) on the no-tillage with straw cover treatment, which was 26.81% and 25.39% higher than conventional tillage treatment, respectively.