Biochar is known to improve soil physical properties, but its role in influencing soil erosion and nutrient losses, as well as biochar itself loss is poorly understood. The objectives of this study were to determine the magnitude of soil, biochar and nitrogen losses in runoff and quantify the degree of sediment enrichment with biochar and nitrogen in a soil amended with biochar. A loessial soil was amended with five rates of nitrogen-rich biochar [0, 1%, 3%, 5%, and 7% (w/w)] that had <0.25 mm particles and incubated for 8 months. A companion study compared three biochar particle sizes (<0.25, 0.25–1, and 1–2 mm) applied at 3% rate. A series of simulated rainfall events (90 mm h⁻¹) were applied to the soil which was held in a box at a slope of 27%. The results showed that biochar addition of 1% or 3% reduced soil loss rates while the 7% biochar addition rate increased soil loss. Biochar loss rate was proportional to the biochar addition rate when the biochar particle size was <0.25 mm. Coarser biochar particles (1–2 mm) are retained in the soil better than the finer <0.25 mm biochar particles. Total nitrogen loss and sediment enrichment with nitrogen and biochar were also lowest with the coarse biochar particles (1–2 mm) addition. The finer biochar particle sizes (<0.25 mm) were more vulnerable to erosion losses and its application caused greater total nitrogen enrichment in sediment. When finer biochar particles (<0.25 mm) are used, 1% biochar application leads to the best results for soils with risks of erosion but 7% biochar increased the risk of soil, biochar, and total nitrogen losses. Our study overall shows that knowledge of the pros and cons of applying biochar should be carefully considered before providing biochar application recommendations as a soil supplement on loess hillslopes.