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Improved management of nitrogen (N) in low N soils is critical for increased land productivity and economic sustainability. We report results of a rainfed rotation experiment, conducted in the Northwest Frontier Province (NWFP), Pakistan, during 1995–1999 to evaluate effects of residue retention and fertiliser N on N2 fixation inputs and yields of a mungbean (Vigna radiata)–wheat (Triticum aestivum) sequence, and a lentil (Lens culinaris)–summer cereal sequence. Mungbean and sorghum (Sorghum bicolor) or maize (Zea mays) were grown in the summers and lentil and wheat in the winters. Immediately after grain harvest, above-ground residues of all crops were either completely removed (−residue), or chopped into 5–20 cm pieces, spread across the plots and incorporated by chisel plough (+residue). Fertiliser N rates were nil or 120 kg N/ha for wheat and nil or 150 kg N/ha for sorghum/maize. The percentage of mungbean N derived from N2 fixation (%Ndfa) ranged from 47% to almost 100% (mean of 75%). On average, mungbean fixed 112 kg N/ha (+residues) and 74 kg N/ha (−residues), with N balances of +64 kg N/ha (+residues) and +9 kg N/ha (−residues). Lentil %Ndfa ranged from 50 to 87% (mean of 73%). Values for crop N fixed were 42–85 kg N/ha, with a mean of 68 kg N/ha. Average N balances for lentil were +27 kg N/ha (+residues) and +16 kg N/ha (−residues). Grain yields of the 0N wheat responded to the previous mungbean (36% increase over the 0N sorghum), but showed an even greater response to fertiliser N applied to the previous sorghum (150% increase). Highest yields were recorded for the N-fertilised wheat (average of 2.27 t/ha). Shoot biomass yields of the 0N sorghum and maize responded strongly to the previous lentil crop (49% average increase over the 0N wheat) and fertiliser N, applied either to the crop itself (140%) or to the previous wheat crop (32%). Residue retention increased shoot biomass yields of both the summer (average of 20%) and winter crops (average of 9%). Grain yield benefits of residues were 13% for mungbean, and 8% for wheat and lentil. Soil organic N and total organic C, labile C and C management index (CMI), were all increased by N inputs, from both fertiliser and N2 fixation, and by retention of residues We concluded that retention of residues improves the N economy of the cropping system and enhances crop productivity through the additional N and other soil effects. The question of whether farmers who traditionally remove residues for fodder and fuel would change practices and return the residues to the soil will depend to a large extent on the relative profitability of both options. [Copyright &y& Elsevier]