ABSTRACT Soybean cropping has been growing in recent years in environments with sandy soils and with climatic risk, but yield is low, especially in the early years. The objective of this study was to evaluate the effect of cover crops and nitrogen management in a sandy soil previously under degraded pastures on soybean yield. The study was conducted in Western São Paulo state, Brazil. The experimental design was randomized blocks, with four replicates, and the treatments were: black oats; black oats + 50 kg ha-1 of N in black oats; black oats + 50 kg ha-1 of N in soybean; black oats + lupine; black oats + lupine + 50 kg ha-1 of N in soybean; lupine; fallow; fallow + 50 kg ha-1 of N in soybean. Nitrogen concentration of the microbial biomass was higher with oats + N in soybean applied at the beginning of flowering (R1). The number of nodules in soybean roots increased by 2.3 times with oats and oats + N in soybean as compared to fallow. Soybean yield was higher in treatments with oats + N in oats (2,130 kg ha-1), oats (2,038 kg ha-1) and oats + N in soybean (1,872 kg ha-1). In the absence of cover crops, N fertilization in soybean increased yield by 19% (262 kg ha-1) compared to fallow. Black oats are the best option to increase soybean yield. However, in the absence of cover crops, nitrogen fertilization in soybean is necessary.