Abstract. In the dryland cropping areas of southern Australia, at risk from dryland salinity, tree belts can improve water management by taking up water unused by crops, with the risk that crop yield will be reduced through competition. As there are few direct markets for tree products grown in the medium to low rainfall areas, the design of agroforestry systems becomes important in reducing the trade-off in crop yield.This study examined some factors that influence the trade-off between crop yield and deep-drainage control in order to develop design guidelines for medium to low rainfall agroforestry. Twenty-one sites in the grain-growing region of Western Australia and southern New South Wales were surveyed over 2 years for crop yields, tree leaf area index, and estimated recharge, providing data from 32 tree-crop interfaces on the relative influence of environmental factors and farming system characteristics on the trade-off between water management and crop yield.The factors most strongly correlated with higher yields were water-gaining sites, orientation that provided shelter from southerly to north-westerly (S, SW, W, NW) winds, and tree age (<10 years). The factors most strongly correlated with the area of cropped land protected against deep drainage were tree age (>10 years), lighter soil types, and low rainfall (<400 mm). Economic analysis of the trade-off required to produce a particular deepdrainage reduction target produced 3 groups of sites: (1) those where trees resulted in a gross margin increase of $15/ha and an estimated deep-drainage reduction of 52% (n = 3), (2) those with a gross margin loss of $49/ha and estimated deep-drainage reduction of 47% (n = 11), and (3) those with a gross margin loss of $163/ha and a deep-drainage reduction of 37% (n = 18). None of the 3 sites in the first group were in the most favourable class in both years, highlighting the vulnerability of a relatively fixed farming system to climate variability.