In order to explore the effects of different straw returning methods on soil carbon and nitrogen cycle, soil hydrothermal processes and winter wheat yield, field experiments were conducted to study the effects of different treatments including no straw returning (T0), straw mulching (T1), straw plowed into the soil (T2), and ammoniated straw plowed into the soil (T3), on soil microbial biomass carbon (MBC), microbial biomass nitrogen (MBN), soil organic carbon (SOC), total nitrogen (TN), soil temperature, water use efficiency (WUE) and wheat yield in Guanzhong Plain. The results showed that straw returning increased MBC and MBN in the early growth stage and reached the highest levels at jointing stage. Straw returning greatly increased SOC and TN in 0-10 cm soil layer as compared to 10-20 cm depth. Compared to control, T1, T2 and T3 treatments increased the average soil temperature in the early growth stages with the highest value in T2, while slightly decreased after overwintering stages. T3, T1 and T2 increased the grain yield by 23.48%, 20.17% and 13.17%, respectively, while the aboveground biomass increased by 19.41%, 5.63% and 11.19%, respectively. WUE of T3, T2 and T1 increased by 28.73%, 15.36% and 18.83% compared with that of T0. Among them, T3 showed better performances on crop grain yield and aboveground biomass than other straw returning methods. Our findings suggest that T3 is more suitable for dry land agriculture farming, in terms of improving the soil quality and crop yield in this region.