|Restoration of soil fertility is important in the peanut-producing portion of the Coastal Plain, where many soils are highly weathered, structurally weak, and low in fertility as a result of intense row cropping. A frequently used cropping system in this region is an annual rotation of cotton (Gossypium hirsutum L.) and peanut (Arachis hypogaea L.) under conventional tillage (CT). This traditional peanut-cotton rotation (TR) often results in erosion and loss of soil organic carbon (SOC). Incorporation of perennial grasses into the peanut-cotton rotation for 2 years (also called the sod-based rotation or SBR) has been suggested for improving SOC in the Coastal Plain, particularly in conjunction with conservation tillage practices. Perennial grasses such as bahiagrass (Paspalum notatum Fluegge) produce a high biomass that may increase SOC and prevent soil erosion, leading to increased nutrient-holding capacity. Incorporating cattle grazing may further enhance SOC storage if managed properly. Greenhouse gases (GHG) occur naturally in the atmosphere and contribute to global climate change by entrapping infrared heat. By incorporating high-biomass crops and conservation tillage in a cropping rotation, the net emission of GHG from agricultural soils may be mitigated through SOC storage. Unfortunately, grazing may increase the emission of GHG from the soil. To determine the environmental effect of perennial grasses and grazing on carbon sequestration in the peanut-cotton rotation, SOC, soil N, and GHG emissions were assessed on established (>10 years) crop rotation systems. Bahiagrass contribution to SOC was derived using stable C isotopic analysis. Systems evaluated in this study included 1) TR under CT, 2) TR under strip tillage (ST), 3) SBR under CT, 4) SBR under ST and 5) SBR under ST with cattle grazing. Total SOC, soil N, bahiagrass-derived SOC, and potential C mineralization increased in the top 10 cm of soil and were stratified with depth under ST in the SBR, indicating the potential for ST to improve soil fertility in the SBR. Grazing bahiagrass decreased SOC in the 5 to 10 cm depth, but this effect was not observed for the subsequent peanut crop and did not appear to have a long-term negative effect on SOC storage. A moderate stocking rate of 2.5 cattle ha-1 appeared to reduce soil emissions of CO2 and N2O, dependent upon season and crop. Flux of CH4 was often negligible; however, grazing resulted in increased soil uptake of CH4 in some instances. For moderate cattle stocking rates used in this study, grazing did not appear to have a negative effect on SOC storage or GHG emissions in SBR systems. The SBR did not show consistent improvements in total SOC compared to the TR. Isotopic analysis of mineralized CO2 indicated SOC with a higher 13C/12C ratio (e.g., bahiagrass-derived SOC) may be preferred over SOC with a lower ratio (e.g., C3 crop-derived SOC) for degradation by microorganisms. Concentration of SOC increased from 2009 to 2012 in many instances, indicating that other conservation practices (e.g., winter cover cropping) maximized SOC storage for Coastal Plain soils evaluated in this study.