Long-term effects of plant covers on yield and oil quality in olive orchards are poorly known. We compared performance of Olea europaea trees grown under either tillage (CT) or permanent natural cover (NC) in a sandy-loam soil over five years and determined changes in soil properties. The soil was tilled from the year of planting until the end of the second growing season, when both soil management treatments were established. The CT treatment was kept weed-free using a harrow with vertical blades (0.10 m depth), whereas the NC was obtained by letting the natural flora grow. Trees were fully irrigated until year 3 after planting, when deficit irrigation (about 50% of full) was started for both soil treatments. Trunk cross sectional area (TCSA) of NC trees was 77 and 87% to that of CT trees at the end of the 2006 and 2010 growing seasons, respectively. Fruit yield and oil yield of NC trees were 65 and 69% to those of CT ones, respectively (means of five years), however, when expressed on a TCSA basis, they resulted 87 and 95%, respectively. The fruit number of NC trees was lower than CT ones, whereas the oil content was similar. There were no differences in free acidity, peroxide value, spectrophotometric indexes, and fatty acid composition, but phenolic concentrations of the NC treatment were slightly higher than those of CT oils. Soil macroporosity in the topsoil was 5.2 and 2% for the NC and CT treatments, respectively. Water infiltration rate in CT plots was lower than in NC ones because of soil surface crusting; NC had higher values of total organic carbon and total extractable carbon than CT, whereas the humic carbon content was unaffected.