Conventional tillage (CT) is the main agricultural practice for rainfed sugarcane production in China. However, subsoil compaction formed by long-term CT is harmful to soil properties and crop yield. Deep vertical rotary tillage (DVRT) is a novel tillage practice, which can alleviate subsoil compaction and create a more favorable soil environment for crop growth. This study aims to compare the effects of DVRT and CT practices on soil properties and sugarcane characteristics. The results showed that DVRT reduced soil bulk density and increased soil porosity to some extent in the 0–40 cm soil profile. Soil water storage of DVRT was relatively higher compared with CT due to the combined effects of soil water holding capacity and vegetation water consumption. There was significantly higher final aboveground biomass, underground biomass, and plant height from DVRT compared to CT (p < 0.05), but there were no differences in final root length between tillage practices. Compared with CT, DVRT with one and two growth-years significantly increased aboveground biomass by 68.90% and 50.14%, respectively. Generally, the soil properties and sugarcane characteristics were not significantly different between DVRT with different growth years. DVRT is recommended as a tillage practice for sustainable agriculture in rainfed regions.