Soil crusting may have significant impacts on infiltration, runoff generation and erosion in agricultural lands or semi-arid and arid soils. The previous investigations on soil crusting were often conducted under simulated rainfall conditions. This study aims to evaluate the effects of soil crusting on soil moisture during inter-storm periods and soil and water losses during storm periods under natural rainfalls. The study site was located in the Loess Plateau of China. Four plots with a uniform slope and size were selected. Soil crusts were kept intact on the two plots throughout the monitoring periods of 1999 and 2000, but were broken after each rain storm event on the other two plots. Soil moisture was measured on all plots with an interval of one week at three depths and total event runoff and sediment discharges were measured in each storm. It was found that no marked difference in soil moisture and runoff exists between the crusted and uncrusted plots. This is because the rapid development of new crusts on the uncrusted plots during the storm events. However, the erosion rate on the uncrusted plots was significantly higher than that on the crusted plots, which was mainly caused by the disturbance of the surface soils on the uncrusted plots. This study questions the effectiveness of a common agricultural practice in the Loess Plateau, hoeing lands after rainfall, in reducing runoff and erosion.