A field study was carried out to monitor the effect of application of molasses based distillery effluent on yields of sugarcane and soil properties. The treatments consisted of main plots: control (I0), first pre-sowing irrigation with undiluted effluent (I1), one irrigation with effluent: tube-well water (1:3) at tillering stage (I2), two irrigations with effluent: tube-well water (1:4) at tillering and 30 d after tillering stage (I3). The subplots either received no fertilizer application (F0) or had 50 % of recommended dose (50 kg N, 60 kg P2O5 and 40 kg K2O ha-1 as basal dose (F1) with top dressing of 50 kg N ha-1 at tillering and in June before the onset of monsoon. Nitrogen to the ratoon crops was applied in three equal splits. Application of 50 % recommended fertilizer dose increased the cumulative cane yields under different effluent treatments. Use of distillery effluent irrespective of the method of application significantly increased the cumulative yields of sugarcane over no application of effluent significantly at p ≤ 0. 05. After the harvest of second ratoon crop, no significant effect of different treatments was noted on soil pH, electrical conductance and exchangeable Na. Significantly higher build-up of organic C in surface soil was noted under I2 treatment in comparison to I0 treatment at p ≤ 0. 05. With no fertilizer application, both I1 and I2 significantly increased accumulation of alkaline KMnO4 hydrolysable N in 30-45 cm layer in comparison to I0F0 at p ≤ 0. 05. In comparison to I0, use of I2 increased the content of Olsen's P significantly (p ≤ 0. 05) in 30-45 and 45-60 cm layers while I3 increased it significantly at p ≤ 0. 05 in 0-15 and 45-60 cm layers. Use of distillery effluent as pre-sowing or standing crop irrigation increased ammonium acetate extractable K in surface and sub-surface layers significantly in comparison to I0 at p ≤ 0. 05. Thus, use of distillery effluent in sugarcane crop as pre-sown or standing crop irrigation had no adverse impact on soil reaction or electrical conductivity and could save at least fifty percent of basal NPK application with significantly higher cumulative millable cane yields of main crop and two subsequent ratoons. {\textcopyright} 2012 Springer Science+Business Media B.V.