With the aim of increasing peanut production in Australia, the Australian peanut industry has recently considered growing peanuts in rotation with maize at Katherine in the Northern Territory—a location with a semi-arid tropical climate and surplus irrigation capacity. We used the well-validated APSIM model to examine potential agronomic benefits and long-term risks of this strategy under the current and warmer climates of the new region. Yield of the two crops, irrigation requirement, total soil organic carbon (SOC), nitrogen (N) losses and greenhouse gas (GHG) emissions were simulated. Sixteen climate stressors were used; these were generated by using global climate models ECHAM5, GFDL2.1, GFDL2.0 and MRIGCM232 with a median sensitivity under two Special Report of Emissions Scenarios over the 2030 and 2050 timeframes plus current climate (baseline) for Katherine. Effects were compared at three levels of irrigation and three levels of N fertiliser applied to maize grown in rotations of wet-season peanut and dry-season maize (WPDM), and wet-season maize and dry-season peanut (WMDP). The climate stressors projected average temperature increases of 1°C to 2.8°C in the dry (baseline 24.4°C) and wet (baseline 29.5°C) seasons for the 2030 and 2050 timeframes, respectively. Increased temperature caused a reduction in yield of both crops in both rotations. However, the overall yield advantage of WPDM increased from 41% to up to 53% compared with the industry-preferred sequence of WMDP under the worst climate projection. Increased temperature increased the irrigation requirement by up to 11% in WPDM, but caused a smaller reduction in total SOC accumulation and smaller increases in N losses and GHG emission compared with WMDP. We conclude that although increased temperature will reduce productivity and total SOC accumulation, and increase N losses and GHG emissions in Katherine or similar northern Australian environments, the WPDM sequence should be preferable over the industry-preferred sequence because of its overall yield and sustainability advantages in warmer climates. Any limitations of irrigation resulting from climate change could, however, limit these advantages.