A detailed field experiment was carried out to study the effect of conventional and zero tillage and legume intercrops on soil health indicators and cotton productivity and also yield components of leguminous crops at the Research Farm, MNS-University of Agriculture, Multan, Pakistan. The field experiment was comprised of four legume intercrops (no intercrops (sole cotton), mung bean, mash bean, and soybean) and two tillage systems (three years zero tillage (ZT) and long-term conventional tillage (CT)). The CT showed the highest plant height (121 cm), total bolls per plant (22.9 bolls), boll weight (2.74 g) and seed yield (2031 kg ha−1) of the cotton crop, as compared to ZT. The highest leaf transpiration rate (9.28 mmol H2O m−2 s−1), net leaf photosynthetic rate (27.17 µmol m−2 s−1), stomatal conductance (0.493 mmol m−2 s−1), chlorophyll content (62.3 SPAD value), plant height (123 cm), total bolls per plant (24.4), boll weight (2.83 g), and seed yield (2090 kg ha−1) of cotton crop were recorded when it was grown as a sole crop, as compared to legume intercrops. However, soil organic matter (0.77%), phosphorus (8.08 mg kg−1), potassium (253 mg kg−1), and microbial population (7.26 × 106 Cfu) were higher in ZT than in CT. Mung bean showed a maximum number of pods (32), seed yield (173 kg ha−1), biomass (950 kg ha−1), and harvest index (19.0%), when intercropped with cotton. The highest land equivalent ratio and area time equivalent ratio were recorded in mung bean and cotton intercropping, grown under a CT system. Furthermore, the maximum benefit-cost ratio was recorded in mung bean and cotton intercropping, over sole cotton cropping under CT (1.75) and ZT (1.67) systems. The ZT and intercropping of leguminous crops with cotton might be a promising option for increasing the seed cotton yield, seed yield of leguminous crops, system profitability, and sustainability of soil health.