Thermal gasification of straw is a highly efficient technology that produces bioenergy and gasification biochar that can be used as a soil amendment, thereby returning non-renewable nutrients and stable carbon, and securing soil quality and crop productivity. A Danish on-farm field study investigated the impact of traditional straw incorporation vs. straw removal for thermal gasification bioenergy production and the application of straw gasification biochar (GB) on soil quality and crop production. Two rates of GB were applied over three successive years in which the field was cropped with winter wheat (Triticum aestivum L.), winter oilseed rape (Brassica napus L.) and winter wheat, respectively, to assess the potential effects on the soil carbon pool, soil microorganisms, earthworms, soil chemical properties and crop yields. The application of GB did not increase the soil organic carbon content significantly and had no effect on crop yields. The application of straw and GB had a positive effect on the populations of bacteria and protists, but no effect on earthworms. The high rate of GB increased soil exchangeable potassium content and soil pH indicating its potassium bioavailability and liming properties. These results suggest, that recycling GB into agricultural soils has the potential to be developed into a system combining bioenergy generation from agricultural residues and crop production, while maintaining soil quality. However, future studies should be undertaken to assess its long-term effects and to identify the optimum balance between straw removal and biochar application rate.