Water is a strong driver of ecosystem function and diversity in resource-limited drylands. Structures that alter the redistribution of water have the potential to affect vegetation pattern and productivity and the maintenance of spatial heterogeneity. We examined the role of surface foraging pits and mounds constructed by the short-beaked echidna (Tachyglossus aculeatus) on runoff generation, sediment detention and seed capture. We speculated that pits dug into biologically crusted interspace soils would reduce overland flow and act as sinks for seed, while mounds of ejected soil would increase sediment availability. Runoff and sediment yield were examined under simulated rainfall with five levels of disturbance representing the pits and mounds of echidnas. Increasing the level of disturbance up to 47% cover of mounds and pits had no effect on time to ponding, steady-state runoff or the coefficient of runoff. However, time to initiation of runoff, sediment removal rates and sediment concentration in runoff water increased with increasing disturbance. Pit-to-pit and surface-to-pit movements of Dodonaea viscosa seed tended to increase, while pit-to-surface movements tended to remain unchanged with increasing disturbance. Surface-resident seed generally moved shorter distances with increasing disturbance. The results highlight the importance of mounds and pits of soil foraging animals for generating and trapping eroded sediment. Runoff and erosion processes may therefore provide a mechanism for coupling critical resources such as seed, water and sediment in resource-rich patches that will contribute to the development of small-scale heterogeneity in woodlands. Copyright © 2010 New South Wales, Australia.