Aims Since the 1970s, extensive croplands were converted to forest and pasture lands to control severe soil erosion on the Loess Plateau of China. We quantify the direct and indirect effects of vegetation restoration on runoff and sediment yield on hillslopes in the field to improve environmental governance. Methods An artificial rainfall experiment at a rainfall intensity of 120 mm h −1 and a slope gradient of 22° were used to distinguish the effects of vegetation restoration on runoff and sediment yield. Results Compared to the farmland slopes, vegetation restoration directly prolonged the time-to-runoff by 140%, reduced the runoff rate by 20%, and increased the soil infiltration capacity by 15%. Vegetation restoration indirectly delayed the time-to-runoff by 120%, reduced the runoff rate and sediment yield rate by 50% and 94%, respectively, and increased the soil infiltration capacity by 58% on the hillslopes with vegetation restoration. Conclusions The direct effects of vegetation restoration on runoff and sediment yield were lower than its indirect impacts. Vegetation cover, decreases in soil bulk density, and increases in belowground root biomasses and > 0.25 mm aggregate stability were the primary causes of runoff and sediment yield reduction on the slopes with vegetation restoration.