Runoff and soil loss was studied on steep terraced slopes containing various combinations of lines of Grevillea robusta, hedgerows of Calliandra calothyrsus and strips of Pennisetum purpureum in Kabale, southwest Uganda. A factorial design, replicated three times, included three levels of intra-row spacing (0, 3 and 5m) of Grevillea spp. and three understorey types (none, Pennisetum and Calliandra spp). The understorey and Grevillea were interplanted along a contour in the middle of the terrace parallel to the two adjacent risers. Results indicate that when contour lines of trees are on fallow ground there is little or possibly a negative effect in controlling soil and water loss. When contour lines are on steep cultivated terraces they have a significant effect in reducing losses. The understoreys appear to filter out much of the sediment from the runoff, holding it in or above the contour line of the vegetation. The potential for using contour lines of Pennisetum and Calliandra for controlling soil and water loss is discussed.