This study examined the economic potential with and without carbon credit payments of two crop and tillage systems in South Central Kansas that could reduce carbon dioxide emissions and sequester carbon in the soil. Experiment station cropping practices, yield data, and soil carbon data for continuously cropped wheat and grain sorghum produced with conventional tillage and no-tillage from1986 to 1995 were used to determine soil carbon changes and to develop enterprise budgets to determine expected net returns for a typical dryland farm in South Central Kansas. No-till had lower net returns because of lower yields and higher overall costs. Both crops produced under no-till had higher annual soil C gains than under conventional tillage. Carbon credit payments may be critical to induce farm managers to use cropping practices, such as no-till, that sequester soil carbon. The carbon credit payments needed will be highly dependent on cropping system production costs, especially herbicide costs, which substitute for tillage as a means of weed control. The C values estimated in this study that would provide an incentive to adopt no-tillage range from $0 to $95.991ton/year, depending upon the assumption about herbicide costs. In addition, if producers were compensated for other environmental benefits associated with no-till, carbon credits could be reduced.