Most vegetable farms in southern New England market directly to consumers and are characterized by high crop diversity and intensive cultivation. Growers rely on tillage to prepare fields for planting and control weeds, but are concerned about the negative effects of tillage on soil health. This study evaluated three tillage reduction strategies in a market garden system producing tomatoes, melons, cucumbers, cabbage, carrots, and lettuce. Treatments of strip tillage into a killed cereal rye (Secale cereale) cover crop mulch, perennial white clover (Trifolium repens), and ryegrass (Lolium perenne) living mulch between planting rows, and annual crimson clover (Trifolium incarnatum) living mulch interseeded between vegetable rows were established in 2010 and compared over 3 years to a control system using tillage to maintain bare ground between rows. Treatments were evaluated for effects on vegetable yield and soil biological, chemical, and physical properties. The strip tillage treatment was the most effective at promoting soil health, resulting in significant increases in soil aggregate stability, potentially mineralizable nitrogen, active soil carbon, and microbial activity relative to the control, and significant decrease in loss of soil organic matter. However, it was not effective for production of vegetables, with the strip-tillage plots having the lowest yields throughout the study. The perennial living mulch treatment produced yields of carrots, melons, and cucumbers similar to the control yields, but reduced yields of tomatoes, cabbage, and lettuce. Microbial respiration was significantly higher than in the control, and nitrate levels, and loss of soil organic matter were significantly lower. The annual living mulch treatment produced yields similar to the control for all crops, and soil health was similar to the control for all variables except soil nitrate, which was significantly higher than the control. Perennial living mulch shows the most promise for improving soil health while maintaining yields in some vegetable crops, but challenges remain in preventing competition between vegetables and living mulches.