A field experiment was conducted to study root production, soil organic matter, and moisture and sorghum yield in an alley-cropping system with Acacia saligna and Gliricidia sepium in the Hararghe highlands of Ethiopia. Tree hedgerows were planted on either side of a 4-m wide crop alley. Intra-row spacing between trees was 25, 50, and 100 cm. In October, 1994 and March, 1995 soil samples were taken at depths of 0-10 cm and 10-30 cm at 50 and 200 cm distance from the hedgerows using direct coring and mesh bags. Roots were separated from the soil by wet-sieving and root weight and root length density were determined. Measurements of soil organic carbon and total nitrogen to a depth of 0-60 cm were made. Field tensiometers were installed at 10, 30 and 60 cm depths. Soil water content was periodically monitored at similar depths. Sorghum grain yield, above-ground dry matter and height were determined. Acacia fine-root (≤2 mm) mass was significantly (p≤ 0.05) higher than for Gliricidia in the top 30 cm of soil. The presence of fine roots decreased by 55% and 40% for Acacia and Gliricidia, respectively, as the distance increased from 50 to 200 cm from hedgerows. Increase in tree root mass was accompanied by proportionally decreased crop root mass. Results of the March samples showed that the dry period is when trees allocate a higher proportion of carbon to the root system to stay competitive under the dry conditions. Leaf and twig dry matter of Acacia was significantly (p≤ 0.05) higher than for Gliricidia. Soil organic matter was lower by 20% and 10% in control and Gliricidia plots compared to Acacia plots. Soil moisture content and water potential measurements indicated that soil moisture was lower in Acacia plots than in the control and Gliricidia plots. Sorghum biomass, grain yield and height were significantly (p≤ 0.05) higher with Gliricidia and control than with Acacia. The sorghum yield reduction with Acacia could be largely due to competition for soil moisture.