Conservation agriculture offers a pathway for enhancing soil health with climate co-benefits in Mediterranean agricultural systems. This study examined long-term impacts of combining no-till management with cover cropping over 20 years in California's Central Valley, providing rare insights into soil system equilibrium under sustained conservation management. We assessed soil physical, chemical, and structural properties comparing reduced tillage with cover crops (CTCC) to standard tillage without cover crops (STNC), employing density fractionation and spectroscopic analysis to understand carbon protection mechanisms. After two decades, conservation agriculture achieved dynamic equilibrium characterized by fundamental shifts in carbon stabilization pathways. Water-stable aggregate analysis revealed the most pronounced management effects, with CTCC exhibiting 136% greater stability than STNC, indicating substantial improvements in soil structural integrity. These structural enhancements corresponded with a reorganization of carbon protection mechanisms: CTCC disproportionately enriched the occluded light fraction (44.1% vs. 35.4% of total recovered carbon in STNC), demonstrating that physical protection within aggregates becomes a dominant carbon stabilization pathway under long-term conservation management. Mineral-associated organic carbon saturation analysis revealed that both management systems remained well below theoretical maximum capacity (11.5% vs. 7.4% saturation for CTCC and STNC, respectively), indicating substantial remaining potential for carbon sequestration even after reaching equilibrium. Physical property improvements under CTCC included 15% lower bulk density and 13% greater water retention at field capacity, though benefits were concentrated in the surface horizon. Our findings demonstrate that two decades of conservation agriculture fundamentally transforms soil functioning through aggregate-mediated physical protection, while creating substantial improvements in soil structural integrity and water retention capacity. This mechanism shift represents a new soil system equilibrium that maintains enhanced functionality and continued carbon sequestration potential in Mediterranean agricultural systems.