With increasing world population, there is an evident pressure on food production demand at the expense of environment. Maximizing yields at environmental cost is quite high especially in terms of soil and water deterioration. Traditional/conventional agricultural system is complemented with intensive tillage, mono-cropping and inappropriate crop residue management with deleterious impacts on the environment. Such agricultural practices have substantially contributed to climate change due to resulting greenhouse gases (GHGs) emissions. In recent decades, “conservation agriculture”, is being adopted which employs no or minimum tillage, diversified crop rotation and efficient crop residues management. Such approaches are associated to the decreased GHGs emissions due to low consumption of fossil fuels and fertilizers (especially N2O emissions from nitrogenous fertilizers). However, increased use of pesticides in conservation agriculture can be an important threat to the environment. This review collates impacts of both agricultural management systems on terrestrial ecosystem functioning in terms of soil quality and environmental sustainability. Impacts of conventional and conservation systems on soil health, carbon sequestration, GHGs emissions, cropping patterns, weed dynamics and environmental degradation are critically evaluated and research gaps are highlighted. Future research directions have been identified to promote the research regarding sustainable agriculture development.