While the impacts of legume-cereal rotations on soil health are well documented, the literature on their economic benefits, especially in dry areas is scanty. By applying the propensity score matching and endogenous switching regression methods to a nationally representative sample of 1,230 farm households from Morocco, this paper provided empirical evidence that the individual and combined adoption of improved varieties of faba-beans and legume-wheat rotations lead to higher yields, farm income and household consumption. Considering a two-year period, the simultaneous adoption of both faba-bean-wheat rotation and improved faba-bean varieties led to $875/ha (136%%) higher net returns relative to wheat mono-cropping. In the face of these very high benefits, high risk of losing faba-bean crops due to pests, diseases or drought explain the low adoption of rotation and improved varieties which are at 26% and 16% respectively. For reaping both the economic and environmental benefits of faba-beans, Morocco and other similar countries in the dry areas will need to invest on the development of varieties with better pest and diseases resistance, introduce crop insurance and different incentive systems, and create better access to extension and certified seed delivery services that induce wider adoption of improved varieties and legume-cereal rotations. Acknowledgement : Funding for this research was obtained from CRP-WHEAT and the EU-IFAD project on Enhanced small holder wheat cropping systems to improve food security under changing climate in the drylands of West Asia and North Africa.