Cotton (Gossypium hirsutum L.) and peanut (Arachis hypogaea L.) producers in the southeastern USA are interested in rotation systems that include winter-annual grazing but are concerned about resulting soil compaction. We conducted a 3-y field study on a Dothan loamy sand (fine-loamy, kaolinitic, thermic Plinthic Kandiudults) to develop a tillage system for integrating winter-annual grazing in a cotton-peanut rotation that increases profitability without degrading soil physical properties. Winter-annual forages and tillage systems were evaluated in a strip plot design with four replications. Forages (horizontal plots) were oat (Avena sativa L.) and ryegrass (Lolium mutiflorum L.). Tillage systems (vertical plots) included: moldboard and chisel plow; and combinations of non-inversion deep tillage (none, in-row subsoiling or paratilling) with and without surface tillage (disk/level). We evaluated cone index, infiltration, soil water content (0-30cm), and cotton/peanut yields. Forage species did not affect soil strength. Grazing increased soil compaction to the 10-cm depth, but tillage (conventional surface tillage or non-inversion deep tillage) reduced compaction and increased soil water removal by cotton/peanut compared to strict no-tillage. Peanut soil water extraction and yield were greater (7% and 21%, respectively) following grazed oat than ryegrass. Strict no-tillage resulted in the lowest infiltration (36% of water applied) and lowest cotton/peanut yields. Greatest infiltration and highest yields were obtained using conservation systems including non-inversion deep tillage without surface tillage. Producers in the region can integrate winter-annual grazing with cotton/peanut using non-inversion deep tillage in conservation tillage systems without sacrificing yields.