Grazing cover crops provides an opportunity to reconnect crop and livestock production on the same land with potential to enhance soil health. However, critical knowledge gaps currently hamper adoption of these diversified systems in organic vegetable production. There is a need to better understand shifts in soil health with grazing of cover crops, especially impacts on soil carbon (C) and nitrogen (N) pools, and the chemical, biological and physical properties of soil regulating sustainable organic vegetable production. We investigated how sheep integration impacts major indicators of soil health of relevance to growers, including soil physical (compaction and soil structure), chemical (pH, salts, macronutrients, labile C and N pools and soil organic matter fractions), and biological (microbial composition and function) properties. We conducted a 4-year randomized complete block design experiment with three winter cover treatments: fallow, ungrazed cover crop and grazed cover crop, in an organic vegetable crop rotation. We found that grazing did not significantly impact soil physical characteristics. Cover crop establishment and grazing did not alter dissolved organic C pools, while cover crops and grazing did lower soil pH. Nitrogen was the only soil nutrient impacted by cover crops or grazing. At moments key to crop production, grazing cover crops increased N availability in organic, inorganic, and microbial pools beyond what ungrazed cover crops could provide. Grazing did not lead to increased potentially leachable nitrate despite greater inorganic N pools during the cropping season. Grazing decreased the fungal/bacteria ratio and increased the gram (+) / gram (–) bacterial ratio, reflecting the increase in labile nutrients. Shifts in the timing of nutrient release and carbon flows with grazing did not lead to significant changes in mineral associated organic matter (MAOM) though there was a trend towards lower POM with 4 years of winter grazing, which needs future longer-term assessment. Organic farmers have the potential to utilize sheep grazing to strategically improve the timing of N release for their crops, with minimal tradeoffs in terms of physical properties, when grazing implementation follows best management practices.