Gravel mulching technology, as one of the most important field management techniques, has been long applied by farmers in dry areas to decrease water evaporation and maintain soil temperature, which can also improve crop production in the arid and semi-arid regions. Studying on the influences of gravel mulching on soil water and temperature as well as ecosystem CO2 emissions will play an important role in assessing farmland ecological effects of gravel mulching. A winter wheat field experiment over two-year periods was carried out and annual CO2 emission was monitored with a static opaque chamber and chromatography method, and the net ecosystem exchange and harvest index were calculated. In the experiment, four field treatments were applied, including CK (control with no mulching), WCK (supplementary irrigation with no mulching), GM (gravel mulching with no irrigation), and WGM (gravel mulching with supplementary irrigation). Compared with the control treatments, the gravel mulching treatments can significantly increase the soil temperature and moisture, for specific performance, WGM was the largest, and followed by GM. Consequently, gravel mulching exerted greater effect on soil water and temperature. Seasonal dynamics of CO2 emissions generally followed the change of soil temperature with high peaks of CO2 fluxes from April to June in both years, whereas CO2 fluxes went conversely with soil water content change over the two years. Statistical analysis also showed that soil temperature and soil moisture had significant interactions on CO2 emissions at P<0.05 level. By the correlation matrix and principal component analyses, the distribution of CO2 emissions was the closest with the two control treatments (CK and WCK), and the farthest with the two gravel mulch treatments (GM and WGM). The gravel mulching practice, particularly the WGM treatment, can significantly influence the distribution of winter wheat growth parameters such as yield, harvest index, net ecosystem exchange and so on. The above mentioned results indicated that the gravel mulching technology had the potential to increase winter wheat yield, promote net ecosystem exchange and reduce CO2 emissions from ecosystem. All in all, gravel mulching combined with supplemental irrigation in the key growth stages could effectively improve soil hydro-thermal conditions, and reduce CO2 emissions from farmland ecosystems.