Prairie cordgrass (PCG) is a perennial crop which has the potential for biofuel production under marginal lands. The intercropping of a perennial legume, kura clover (KC) with PCG can reduce the use of chemical fertilizer while maintaining the soil hydro-physical conditions. The objective of this study was to compare the soil hydro-physical properties and greenhouse gas (GHG) fluxes under PCG intercropped with KC (PCG–KC), and PCG fertilized with graded levels of N (0, 75, 150, and 225 N kg ha⁻¹). During the summer of 2021, soil samples (0–10 cm) were collected. Additionally, gas samples were collected weekly from April through September of the same year. Soil water retention, saturated hydraulic conductivity (K_sat), thermal conductivity (λ), soil organic carbon (SOC), and total N (TN) concentrations were measured. Soil pore characteristics were measured using X-ray computed tomography. The PCG–KC had 1.42 g kg⁻¹ TN and 24 g kg⁻¹ SOC at 0–10 cm, non-significant to PCG-75, 150, and 225 N. Nonetheless, TN significantly increased in both PCG–KC and other fertilized treatments compared to the control. Intercropping boosted macroporosity (0.024 cm³ cm⁻³), K_sat (+50%), and lowered λ (−1%), compared to the N fertilized treatments. Soil cumulative CO₂ under PCG–KC (1012.67 kg C ha⁻¹) was similar to PCG-75, 150 N, but lower than PCG-225 N (1418.66 kg C ha⁻¹). Overall, this study showed that PCG–KC can be a sustainable option over the use of N fertilizers since they had similar levels of hydro-physical characteristics and had a comparable ability to mitigate GHG emissions.