Intercropping alleys in agroforestry provides an income source until the tree crop produces harvestable yields. However, cultivation of annual crops decreases soil organic matter and increases soil erosion potential, especially on sloping landscapes. Perennial crops maintain a continuous soil cover, increase water infiltration, reduce soil erosion, and improve overall soil quality. The objective of this on‐farm study was to assess the effects of a perennial legume, kura clover (Trifolium ambiguum M. Bieb.), on soil quality in a recently established pecan (Carya illinoinensis Wangenh. C. Koch) orchard. The pecan‐kura clover agroforestry practice was established on deep loess soils of the Missouri River hills landscape. These silt loams are on 2–20% slopes and can be highly erosive. Kura clover, introduced as the alley crop 5 years after pecan planting, was selected based on its perennial growth habit, nitrogen‐fixing ability, winter hardiness, high forage quality, and soil conservation properties. Kura clover was seeded in 2001 and harvested for hay annually beginning 2003. Soil quality indicators of total organic C, total N, water‐stable aggregates, and selected soil enzymes were determined on surface soil samples collected annually after kura clover establishment. Soil organic C and activities of soil enzymes increased compared with cultivated and grass pasture control soils by the eighth year of establishment. Water‐stable aggregation improved by 50% and surface soil shear strength improved significantly (P < 0.05) in alleys compared with control sites. Results illustrate that kura clover as the alley‐cropped component improved soil fertility and biological activity through increased organic matter and improved soil structure, and yielded high quality forage valuable for the cattle‐feeding operation. Kura clover maintained or improved soil quality, reduced soil erosion potential, and benefited pecan growth by providing a source of soil nitrogen and improving soil structure for adequate water infiltration and aeration.