Low productivity, depletion of soil fertility, and inefficient energy use are the major challenges of fragile Jhum (shifting cultivation: 280 M ha worldwide) agro‐ecosystems in north eastern Himalaya. Farmers' participatory field trials were conducted in sloping lands of Meghalaya, India over 3 years to identify suitable agronomic management practices and input responsive rice genotypes for sustaining soil health and enhance carrying capacity of Jhum land. Eleven genotypes of rice (six high yielding varieties [HYVs] and five landraces) were tested under two management practices, namely, improved Jhum (line‐sowing in contour, 50% recommended dose of nutrients (RDN) + farm yard manure 5 Mg ha−1 with two hand weeding operations) and traditional Jhum (broadcasting, no manure/fertilizer/pesticides, and single hand weeding) as reference. Improved Jhum practices significantly increased (p = 0.05) rice yield (103.8%–133.7%), improved soil health, farm profitability, net energy output, and energy intensity. The HYVs of rice, namely, RCM 5, Bhalum‐3, and IURON 514 (1.92–1. 96 Mg ha−1) significantly out yielded local landraces, namely, Mannar, Kbaslu, Kba Khasi, Pnahiong, and Pnahlaispah (1.44–1.65 Mg ha−1). The soils under improved Jhum practices had significantly higher SOC (16.9 g kg−1), available N (278.2 kg ha−1), P2O5% (12.8 kg ha−1), K (217.1 kg ha−1), and more water infiltration rate (74.1 mm h−1) over traditional practice after 3 years of our present study. The rice yield for second and third year of cropping were also significantly higher (p = 0.05) under improved Jhum practices (2.23 and 2.01 Mg ha−1, respectively) as compared to traditional Jhum. The net income enhanced by 53% and 85 to 104.6% owing to adoption of improved Jhum and HYVs over local practice and genotypes, respectively. Hence, growing HYVs of rice, namely, RCM 5, Bhalum‐3, and IURON 514 along with improved agronomic practices are recommended for achieving higher productivity, extending carrying capacity, and sustaining soil health in Jhum ecosystems of north eastern Himalaya.