Agroforestry (AF) is a nature based intensive land management practice where trees and shrubs are intentionally integrated into crop and livestock management practices to optimize benefits arising from biophysical interactions among the components. Due to the interactions among the components, AF provides numerous ecosystem services including soil health (SH) benefits. Agroforestry was approved by both the afforestation and reforestation programs and under the Clean Development Mechanisms of the Kyoto Protocol for carbon sequestration (CS). The objective of this long-term alleycropping AF practice was to evaluate changes in soil carbon (SC) and selected soil physical parameters (infiltration, saturated hydraulic conductivity, porosity, and aggregate stability). Soil samples were collected from corn-soybean crop alleys, tree buffers, grass buffers, and grass waterways to quantify differences in SC and physical parameters by treatments. Results of the study indicated that SC%, stocks, and the rate of SC accumulation were greater in AF areas and grass buffer areas than crop areas. Soil C stocks were 106, 102, and 91 Mg ha-1 for tree buffer, grass buffer, and crop areas 25 years after establishment of buffers. Soil water infiltration, saturated hydraulic conductivity (Ksat), porosity, and aggregate stability were greater in tree buffer areas than the crop areas. Improvements in SH indicators can be attributed to increased litter material, roots, activities of soil fauna, and reduced disturbance. Results of the study show that adoption of agroforestry in corn-soybean rotations improve SH including soil carbon (SC), physical properties, and thereby enhance water quality and land productivity.