Agricultural ecosystems have been viewed with the potential to sequester atmospheric carbon dioxide (CO2) by increasing soil organic carbon (SOC) through reduced tillage and cover cropping practices. There remains considerable uncertainty, however, regarding the carbon (C) sink/source potential of these systems and few studies have examined C dynamics in conjunction with other important greenhouse gases. The objective of this study was to evaluate the impact of an alternative management scenario (reduced tillage and cover cropping) on ecosystem respiration (RE) and nitrous oxide (N2O) and methane (CH4) fluxes in a maize (Zea mays L.)/soybean (Glycine max L.) rotation ecosystem in east-central Minnesota, United States. The control treatment was managed using fall tillage with a chisel plow in combination with a tandem disk, and the experimental treatment was managed using strip tillage and a winter rye (Secal cereale) cover crop. Over the two-year study period (2004–2005), cumulative RE was 222.7 g C m−2 higher in the alternatively managed treatment as a result of increased decomposition of the cover crop residue. N2O fluxes were similar in both treatments during the 2004 growing season and were 100.1 mg N m−2 higher in the conventional treatment during the 2005 growing season after nitrogen (N) fertilization. N fertilization and fertilizer type were the dominant factors controlling N2O fluxes in both treatments. CH4 fluxes were negligible in both treatments and often below the detection limit. Cumulative growing season N2O losses in the control and experimental treatments, which totalled 38.9 ± 3.1 and 26.1 ± 1.7 g C m−2 when converted to CO2 equivalents, were comparable to the annual estimates of net ecosystem CO2 exchange in both treatments. This study further supports that N2O losses are an important component of the total greenhouse gas budget of agroecosystems. It also suggests that spring cover cropping, without residue removal, has limited C sequestration potential. The results from this study, however, may not necessarily represent equilibrium conditions in the experimental treatment. Rather, they are a measure of the transient response of the system after tillage conversion and cover crop addition. It is expected that the soil microbes will continue to adjust to the reduction in tillage and increased C inputs. Therefore, continued, long-term monitoring is needed to confirm whether the results are representative of equilibrium conditions.