Abstract The main objective of this thesis was to investigate tree - cover crop interactions and soil response in an intercropping system, in which leguminous and grass cover crops were used with birch (red-leaved Downy birch Betula pubescens L.). The investigation was conducted in two field experiments in a nursery and in a greenhouse experiment. In the latter the effect of the water supply in interspesific competition was also investigated. The cover crops in the field experiments were perennial clovers Trifolium pratense L., T. repens L. and T. hybridum L. and annual clovers T. incarnatum L., T. resupinatum L. and T. subterraneum L. and perennial Festuca rubra L. The height, stem diameter, leaf area and nutrient status of the birch were determined, as well as soil nutrient status and microbial characteristics. The cover crops in the greenhouse experiment were T. repens, T. subterraeum and F. rubra. The biomass, height, leaf area, leaf area index, specific leaf area and N concentration of the birch, the biomass and N concentration of the cover crops were measured, and soil N and microbial characteristics, as well. Bare ground was the control in all the experiments. The perennial clovers and Festuca strongly decreased the birch growth and nutrient status, but the annual clovers sown in midsummer in the field experiments provided about as good growth as bare ground. In the greenhouse experiment all cover crops were effective competitors with the birch. The soil NO3-N was, in general, the highest on bare ground and second highest in the annual clover plots. Though there were, in general, only minor differences in the soil nutrient concentrations between the treatments, there were significant differences in the tree growth and nutrient concentrations. The interspecific competition in this kind of intercropping system is mainly belowground. The growth reduction in the birch was mainly due to competition for nitrogen but water seems to play an important role in regulating the competitive interaction between the birch and cover crops. The competition for these resources seems to be most crucial at the beginning of the growing season. The microbial biomasses and soil respiration were greatest in the Festuca and perennial clover treatments, which may indicate that microorganisms together with these cover crops may seriously compete with birch for nutrients. Intercropping system is complex and comprises both negative and positive influences. In order to minimize negative competition effects, the cover crop should be non-competitive or the ground should be kept free of vegetation at the beginning of the growing season. By improving soil microbial characteristics, the vegetative ground covers make this cropping system one possiblity towards sustainability in the long-term.