To investigate the effect of paddy-upland (PU) rotation system on greenhouse gas emissions, methane (CH4) and nitrous oxide (N2O) emissions were monitored for three years for a PU rotation field (four cultivations (wheat-soybean-rice-rice) over three years) and continuous paddy (CP) field on alluvial soil in western Japan. Soil carbon storage was also calculated using an improved Rothamsted Carbon (RothC) model. The net greenhouse gas balance was finally evaluated as the sum of CO2eq of the CH4, N2O and changes in soil carbon storage. The average CH4 emissions were significantly lower and the average N2O emissions were significantly higher in the PU field than those in the CP field (p < 0.01). On CO2 equivalent basis, CH4 emissions were much higher than N2O emission. In total, the average CO2eq emissions of CH4 plus N2O in the PU field (1.81 Mg CO2 ha−1 year−1) were significantly lower than those in the CP field (7.42 Mg CO2 ha−1 year−1) (p < 0.01). The RothC model revealed that the changes in soil carbon storage corresponded to CO2eq emissions of 0.57 and 0.09 Mg CO2 ha−1 year−1 in the both fields, respectively. Consequently, the net greenhouse gas balance in the PU and CP fields were estimated to be 2.38 and 7.51 Mg CO2 ha−1 year−1, respectively, suggesting a 68% reduction in the PU system. In conclusion, PU rotation system can be regarded as one type of the climate-smart soil management.