This study investigates the impact of Aonla-based intercropping systems on potassium fractions, microbial populations, crop yields, and water holding capacity in arid and semi-arid regions, with the goal of enhancing soil fertility and sustainability in fruit-based cropping systems. The research examines various forms of potassium-water-soluble, exchangeable, non-exchangeable, and lattice potassium, each crucial for soil fertility and plant growth. The fruit-based cropping system evaluated include Aonla + Khejri, Aonla + Bael, Aonla + Kinnow, Aonla + Moringa, Aonla + Ber, Aonla + Mulberry, and a sole Aonla as control. The results showed significant differences in potassium fractions across the systems. The Aonla + Khejri system exhibited the highest water-soluble potassium (29.18 mg kg⁻¹) and exchangeable potassium (29.98 mg kg⁻¹), indicating enhanced potassium availability for plant uptake. Aonla + Kinnow recorded the highest total potassium content (4526.12 kg/ha), contributing to increased potassium reserves. Non-exchangeable potassium ranged from 728.94 mg kg⁻¹ in Aonla + Mulberry to 1375.03 mg kg⁻¹ in Aonla + Khejri, highlighting the long-term potential of intercropping in mobilizing potassium from the soil’s mineral pool. The Aonla + Khejri system showed the highest yield, attributed to improved nutrient availability and enhanced water retention. The water holding capacity was notably higher in intercropping systems, with Aonla + Khejri showing the most improvement, indicating better moisture retention and reduced water stress. Additionally, microbial populations, including bacteria, fungi, and actinomycetes, were higher in intercropping systems, particularly Aonla + Khejri, which recorded the highest bacterial (284.13 cfu×10⁸/g), fungal (217.00 cfu×10⁸/g), and actinomycetes (114.00 cfu ×10⁸/g) counts. In conclusion, this study demonstrates that intercropping, especially Aonla + Khejri, improves potassium dynamics, soil fertility, microbial populations, crop yields, and water holding capacity, promoting sustainable agricultural practices in arid and semi-arid regions.