Dryland ecosystems are particularly susceptible to the adverse effects of intensive agriculture, with intensive tillage exerting a major impact on soil health and its biotic components. The implementation of less disturbing soil management practices can be essential for preserving the soil environment and maintaining the diverse communities of microorganisms, micro- and mesofauna, which are essential contributors to soil fertility. In this study, we assessed soil chemical properties, soil biodiversity and functionality, and wheat crop growth across a tillage gradient encompassing no-tillage (NT), minimum tillage (MT), and standard tillage (ST). Results showed that NT resulted in increased soil macronutrient levels compared to MT and ST. In general, reduced tillage increased the abundance of soil biota, with significantly higher levels of bacterial and fungal marker genes observed in MT and NT compared to ST. Nematode abundance increased by 25% in MT and 50% in NT, compared to ST and predatory acari were significantly more abundant in NT, while numbers of total acari were higher in both NT and ST compared to MT. Community structure analysis revealed that tillage strongly influenced bacterial, fungal and acari community composition, reflecting a gradient of soil disturbance intensity. Corresponding to the increased abundance of soil biota, reduced tillage increased microbial activity and soil functionality along the disturbance gradient. This was evident in the potential activity of carbon, nitrogen and phosphorus cycling enzymes, as well as the microbial capacity for carbon utilisation. In addition, evidence of the formation of biocrust as a possible source of carbon input was found. Furthermore, we observed important wheat pathogens to decrease and fungal antagonists to increase in NT compared to ST. Despite enhanced soil biological indicators under reduced tillage, wheat growth, nitrogen uptake and grain B vitamin contents were higher in ST compared to NT. In addition, we observed a shift in technological grain properties across tillage practices. The higher root:shoot ratio (an indicator of nitrogen deficiency) and median root diameter (hormone-driven lateral expansion) in NT suggest that soil compaction could be a potential cause of reduced wheat performance. These results suggest that despite improved soil biological indicators, other factors such as a low rates of N mineralization potential and prevalence of soil compaction may be limiting wheat performance in NT systems.