Corn and soybean have predominantly been cultivated in rotation in the U.S. Midwest, with the remaining corn grown as continuous monoculture. The corn-soybean rotation is widely recognized for its benefits in improving corn and soybean yield compared with continuous-cropping systems. However, the underlying mechanisms of how crop rotation and nitrogen (N) fertilizer application on agroecosystem carbon (C) and N dynamics are not fully understood. In this study, we utilized the advanced agroecosystem model, ecosys, to evaluate the impacts of different crop rotations (corn-soybean and continuous-corn) on soil inorganic nitrogen (SIN) and soil organic carbon (SOC) dynamics. We first validated ecosys using extensive N trial data collated from seven Illinois sites from 1999 to 2008, and carbon flux data from three flux tower sites in Illinois from 2021 to 2022. The model's performance demonstrated ecosys' ability to accurately capture N fertilizer-yield responses and daily gross primary production (GPP) under different rotation systems. We then assessed the integrated outcomes of different rotation systems based on the simulations of seven Illinois sites during 1999 to 2022. We found that: (1) soybean leaves less residue but has a higher residual N/C than corn, resulting in increased early-season soil temperature and organic N contents in the subsequent corn year. Both of these factors enhance soil mineralization and N uptake, thereby contributing to higher corn yield in corn-soybean relative to continuous-corn systems. (2) Adding more N fertilizer in the corn year can partially (not completely) replace the yield benefit from corn-soybean over continuous corn. (3) Although the corn-soybean rotation produced less GPP, further resulting in a reduction in long-term SOC compared with continuous corn, it improved environmental sustainability by reducing N leaching, N2O, and NH3 emissions. Our findings provide essential insights for understanding both the economic and environmental benefits of adopting corn-soybean rotations in the U.S. Midwestern agroecosystems.