A field experiment located in southern New South Wales compared the component yields of cereal–lucerne companion crops (cereals sown into established lucerne) with the yields of cereal and lucerne monocultures. In-crop lucerne herbicide suppression, cereal crop types (wheat and barley), and top-dressed nitrogen (N) were evaluated for the potential to improve cereal production in the presence of lucerne. Plant populations and biomass, cereal grain yields, and grain quality (protein, screenings, and contamination) were measured. Over the 3-year study, cereals sown into established lucerne (4 years of age at the commencement of the experiment) yielded 17% less (P < 0.05) grain than the cereal monoculture. Companion cropping also resulted in a 71% reduction (P < 0.05) in lucerne biomass over the growing season compared with the lucerne monoculture, but a 3-fold (P < 0.05) increase in total (cereal and lucerne) biomass production. There were no differences between wheat and barley crops in the presence of lucerne, although extensive lodging in the 2003-barley monoculture did result in a significant main treatment (+/0 lucerne and +/0 in-crop lucerne suppression) × crop type (wheat and barley) interaction in grain yield, but not cereal biomass. N top-dressed after tillering onto cereal–lucerne companion crops did not increase grain yield, although it did increase cereal biomass in 2003. Whilst in-crop lucerne suppression did not increase cereal grain yields, it did increase (P < 0.05) cereal biomass and reduced lucerne biomass at cereal maturity and contamination (lucerne pods and flowers) of the cereal grain. However, this practice reduced (P < 0.05) lucerne populations, and therefore potentially threatens the longer term viability of lucerne stands so more research is recommended to develop less detrimental strategies for achieving effective in-crop lucerne suppression. This study combined with results from others, suggests that rainfall was a major factor determining cereal responses in the presence of lucerne, and although there were responses in cereal biomass to additional N and herbicide suppression, these strategies appear to only have potential under favourable growing-season conditions.