A field experiment was established to test the impact on crop yield, total productivity and biological di-nitrogen (N2) fixation of a self-regenerating annual legume, subterranean clover (Trifolium subterraneum L.), grown in mixtures with experimental perennial wheat lines. Legume content was altered in one intermediate wheatgrass (Thinopyrum intermedium (Host) Barkworth & Dewey) and two wheat (Triticum aestivum L.) × wheatgrass (Th. spp.) hybrid-based stands by sowing the legume in the same drill row as the perennial crop, or in every second or third row, spatially separated from the perennial crop. The hybrid perennial crops were more vigorous than intermediate wheatgrass in year 1, competing strongly and reducing legume biomass over the 2 yr period leading to reduced inputs of fixed nitrogen (N). However, both hybrid crops declined to negligible levels following the first summer with only the intermediate wheatgrass persisting in adequate densities in year 2. Spatially separating the perennial crop from the legume in alternate drill rows increased legume biomass by 32–128% and clover regeneration by 31–195%, and reduced weed incursion by up to 47% compared with where it was sown in mixed rows. However, spatial separation more than halved grain yields in year 2 compared with where the perennial crop was grown in every drill row. This likely reflected changed competition dynamics where the modified spatial configurations at sowing limited the perennial crops’ access to resources. When estimates of the total inputs of fixed N from the clover (5–165 kg N ha−1 in year 2) were compared with the amounts of N removed in grain by the different perennial wheat treatments (10–55 kg N ha−1 in year 1), it appears feasible that a companion legume could fix sufficient N to maintain the N balance of a cropping system producing 1.5–2.0 t grain ha−1 each year. The inclusion of a legume increased total above-ground biomass by up to 142%, particularly in year 2, but this did not translate into increased grain yields. It seems unlikely that a self-regenerating annual legume will be able to effectively coexist among a dense perennial wheat canopy where both species are sown in the same drill row. Further research is required to develop strategies to channel more of the additional resources apparently accessed by the companion legume into grain production.