Red sandy loam soils which cover a large area in Andhra Pradesh, India become very hard on drying due to low clay, low organic carbon and presence of free iron oxides. Structure of these soils is very poor and are prone to runoff and soil losses. Providing tree cover in these soils has advantage in building surface litter thereby organic matter which improves soil physical environment besides enhancing the soil fertility, and reversing the nonproductive lands to productive soils. As several trees in combination with pastures or crops add enormous amount of litter to soils various land use systems were evaluated in the context of soil physical environment. An investigation was carried out to evaluate different land use systems on soil physical environment in Agroforestry Research Unit, Hyderabad, Andhra Pradesh, India. The land use systems evaluated were Agri-horti, Agri-silvi-horti, Silvi-pasture, Leucaena leucocephala, Eucalyptus camaldulensis, Acacia albida, Azadirachta indica, Tectona grandis besides Agricultural and Fallow lands. Soils under all the land use systems were neutral in reaction and non-saline. The soil samples were collected upto 60 cm depth at regular intervals of 15 cm. Studies on soil hydrophysical properties like hydraulic conductivity, water retention at different tensions and bulk density on undisturbed samples, infiltration characteristics in situ and degree and size of aggregation on samples passed through 8 mm were made. All the land use systems showed comparatively lower bulk densities when compared to Agricultural land and Fallow land. Lowest bulk density (1.50 Mg m^-3) was recorded by Agri-horti system followed by Silvi-pasture (1.52 Mg m^-3) and highest by Fallow land (1.60 Mg m^-3). Hydraulic properties like conductivity at saturation, water retention and storage were highest under Agri-horti system, and were significantly correlated with organic carbon status as influenced by different land use systems. The soil organic carbon status was found to be highest under Agri-horti system (0.90 %) followed by Silvi-pasture (0.76%), Agri-silvi-horti system (0.74%) at the surface layer (0-15 cm). Infiltration characteristics were moderate in nature in all land use systems, amongst agri-horti recorded highest value. They were significantly correlated with the degree of aggregation in terms of aggregates >0.25 mm and mean weight diameter. All the soil physical parameters recorded lowest values in fallow land followed by agricultural land. Wholesome effect of different land use systems was assessed through Physical Rating Index, calculated by giving weightages to physical properties. Based on physical index value fallow land and agricultural land were classified as class IV indicating that they were slightly suitable for cultivation. Lands under Agro-forestry systems were classified as class III, moderately suitable category where the expected yield is 50 per cent of potential yield. The yields could be increased by appropriate soil management practices like addition of organic matter, clay mixing and deep ploughing. Based on the results it was concluded that agri-horti system was a viable alternative under rainfed conditions to improve the soil structure besides sustaining the soil fertility.