Biochar has shown potential in reducing inorganic nitrogen (N) leaching losses from inorganic and organic fertilizer sources in coarse-textured soils. Little information, however, is available on the effect of biochar on the availability of the retained inorganic N in biochar-amended sandy soil. The objective of our study was to determine the potential of pine wood biochar to reduce the leaching of ammonium nitrate fertilizer (100 kg N ha−1) from sandy soil (W. Cape, South Africa) and to quantify the exchangeable inorganic N (2 m KCl) remaining after intensive leaching. Laboratory columns containing sandy soil and biochar (0, 0.5, 2.5 and 10.0% w/w) were leached weekly over a period of six weeks simulating heavy winter rainfall. Biochar (0.5, 2.5 and 10.0% w/w) significantly reduced the cumulative amount of ammonium (12, 50 and 86%, respectively) and nitrate (26, 42 and 96%, respectively) leached relative to the control soil. Despite the observed strong reduction in inorganic N leaching, the leached biochar-amended soils contained only small amounts of exchangeable ammonium (0–7.3 mg kg−1) and nitrate (5.8–8.0 mg kg−1). The results show that pine wood biochar can strongly reduce not only the amount of ammonium and nitrate leached from sandy soils, but also the amount of recoverable exchangeable ammonium and nitrate after leaching. Furthermore, the 2.5 and 10.0% biochar application rates led to over-liming. This raises some concerns as to the practical use of biochar in improving N fertilizer-use efficiency of plants.