Key challenges in agriculture include enhancing tolerance to extreme climatic events and reducing environmental impacts. While diversified crop rotations and cover crops are known to reduce pest incidence and improve soil health, their combined effects on production, especially during extreme droughts, remain unclear. To examine the impact of crop rotation diversity and cover crops on grain yield and pesticide footprint (measured by the Environmental Impact Quotient, EIQ) of rainfed maize and soybean in both normal and extremely dry years, we applied mixed-effects models to data from 1777 fields in Argentina. Overall, increasing crop rotation diversity reduced field EIQ, with the impact on grain yield varying based on crop type, nitrogen fertilization, and year. Maize yield improved with crop rotation diversity in the dry year, particularly with low nitrogen fertilization, reaching yields similar to those in normal year. Soybean yield, instead, was unaffected by either crop rotation diversity or cover crops. While grain yields of crops following cover crops and fallow were comparable, fields with cover crops showed a reduction in EIQ of up to 20 %. Diversified crop rotations emerge as an effective management strategy to alleviate drought and low nitrogen fertilization’s adverse effects on maize yield. Additionally, cover crops help reduce agriculture’s environmental impact without diminishing maize and soybean production. Our findings underscore the importance of crop diversification in developing a more sustainable agricultural system with reduced inputs and enhanced drought resilience.