In Tunisia, the olive is the most cultivated fruit crop in the northern region, where annual rainfall exceeds 400 mm. This olive-growing area is characterized by a wide coverage of marginal soil with a high slope gradient. Therefore, the inclusion of cover crops in olive orchards is a sustainable solution to enhance ecosystem productivity, improve soil fertility, and increase oil yields. This study aimed to investigate the short-term (two cropping seasons in 2021 and 2022) effects of different seeded cover crops and soil management practices on soil characteristics, as well as soil health by measuring soil enzyme activities and microbial diversity. Six cover crop types consisting of wheat, vetch, oat, fenugreek, a vetch–oat mixture, and spontaneous vegetation were tested in association with rainfed olive trees (cv. Chetoui) in the north of Tunisia and compared to a control (which was tilled periodically three times per year without intercropping). During the first cropping season, cover crops were cut as animal feed, and only residues were incorporated into the soil. However, during the second year, all cover crop biomass was incorporated into the soil. The results indicated that the dry biomass production and carbon uptake were significantly higher in grass species (wheat and oat). All of the cover crops, including the spontaneous vegetation, significantly increased soil organic matter (SOM) and macronutrient levels, mainly, available phosphorus. On the other hand, the highest level of soil nitrogen was found in the fenugreek cover crop. The soil enzyme activities in the cover crops of wheat, oat, and the vetch–oat mix were higher than those in the control. Together with the increase in soil organic matter (SOM), this demonstrates a significant improvement in soil health with cover crops. Furthermore, this study proves that the utilization of carbon sources was dominated by amides, amines, and amino acids in the fenugreek plot, while it was dominated by polymers and carboxylic acids in the case of the wheat and oat. Overall, this study demonstrates that seeding cover crops is a sustainable management practice not only to integrate livestock but also to improve soil health in semiarid olive orchards.