Abstract: Intercropping has an outstandingly long history in China. Studies have reported several advantages of cereal- legume intercropping systems, including increased yields, land use efficiency, natural resources utilization, and pest and disease control. This has a huge potential to significantly contribute to the sustainability of modern agriculture. As cereal crop, sugarcane is a major economic crop used in the production of sugar in China. Its wide-row planting space and slow growth rate during initial growth stage provide the required niche of space and resources for intercropping. However, long-term mono-cropping of sugarcane along with the overuse of nitrogen fertilizer has induced severe nitrous pollution in the environment and high cost of agricultural production in South China. Sugarcane-soybean intercropping can reduce nitrogen application while maintaining high crop yield, in turn reducing the overall cost of farming, enriching soil fertility and enhancing soil carbon sequestration in the field. However, few studies have investigated carbon balance under sugarcane intercropping and carbon sequestration in sugarcane intercropping fields. The objective of this study was to determine the effects of sugarcane and soybean intercropping under reduced nitrogen fertilizer on soil carbon balance. This study will further strengthen the scientific basis for the uptake and utilization of soil nutrient and the relationships among nutrition utilization and environmental factors under intercropping systems. To that end, a field experiment was conducted in 2012–2013 in South China Agriculture University. The study analyzed carbon balance and sequestration in farmlands in sugarcane-soybean intercropping systems with crop line ratio of 1︰1, sugarcane-soybean intercropping systems with crop line ratio of 1︰2, monocropped sugarcane (MS) under two nitrogen levels (N1, 300 kg·hm^-2 and N2, 525 kg·hm^-2) and monocropped soybean under zero nitrogen supply during crop growth season. Carbon balance and sequestration in farmland soils were investigated in this study using Input-Output Analysis, where carbon input and output were quantified for crop growth period in order to determine the intensity of carbon sink. The results showed that carbon input under sugarcane-soybean (1︰2) intercropping system was significantly higher than that under monoculture sugarcane and sugarcane-soybean (1︰1) intercropping under two nitrogen application levels. Compared with sugarcane-soybean (1︰1) intercropping and monoculture sugarcane, carbon output under sugarcane-soybean (1︰2) intercropping was significantly decreased with reducing nitrogen application in 2012, although there was no significant difference in 2013. After harvesting sugarcane, soil carbon storage under sugarcane-soybean intercropping systems with reduced nitrogen application was significantly higher than that under monoculture sugarcane. Carbon budget analysis for sugarcane-soybean intercropping systems showed that sugarcane-soybean (1︰2) intercropping was a good net carbon sink with high carbon fixation of 2 956.35 kg·hm^-2 in 2012, and 872.59 kg·hm^-2 in 2013 under reduced nitrogen application conditions. It was noted that sugarcane-soybean (1︰2) intercropping with reduced nitrogen application had better carbon storage potential. In addition, the value of land equivalent ratio (LER) of sugarcane-soybean intercropping systems exceeded 1.0 in 2012 and 2013. Also LER of sugarcane-soybean (1︰2) intercropping system with reduced nitrogen application was higher than 1.0. In conclusion, sugarcane-soybean intercropping system (1︰2) with reduced nitrogen application was a feasible production mode for the sustainability of modern agriculture.