Known also as ‘islands of fertility’, under-canopy habitats in arid and semiarid regions experience reduced radiation, milder temperatures, lower evaporation, higher organic matter and sometimes even high-biomass biocrusts. By shielding the soil from direct raindrop impact (and thus preventing the formation of a physical crust (PC)), but providing longer surface wetness duration that facilitate longer biocrust activity, the under-canopy habitat affects runoff and subsequently sediment yield. In an attempt to evaluate the shrub role in runoff and sediment yields on biocrusted surfaces that lack PC, triplicate plots were established and monitored in the Nizzana Research Site (NRS) during 1990–1995 at the under-canopy of (a) undisturbed biocrust (CUC), (b) disturbed (rodent pits and tunnels) biocrust (DUC) and (c) on non-shaded biocrust that served as control (COT). The data showed high variability in between the plots, with runoff and sediment yields following the pattern COT > CUC > DUC. However, while significant differences characterized the sediment yields of DUC and COT and CUC and COT, only DUC yielded significantly lower amounts of runoff than COT, while runoff at COT and CUC did not exhibit significant differences. Multiple regression analysis showed that biocrust cover and weighed chlorophyll best explained runoff yield. Overall, runoff of all plots yielded a significant high correlation with the biocrust cover (r2 = 0.91) and weighed chlorophyll content (r2 = 0.77), with significantly high correlation being also obtained between runoff and sediment yields (r2 = 0.74). It is concluded that unlike non-biocrusted surfaces where shrubs may affect runoff yield by preventing the formation of PC and thus runoff generation, high-biomass biocrust at NRS acts to compensate for the absence of PC and may yield, during certain events, comparable amounts of runoff to that of non-shaded habitats. Copyright © 2015 John Wiley & Sons, Ltd.