Pyrolysis of crop biomass generates a by-product, biochar, which can be recycled to sustain nutrient and organic C concentrations in biomass production fields. We evaluated effects of biochar rate and application method on soil properties, nutrient balance, biomass production, and water quality. Three replications of eight sorghum [ Sorghum bicolor (L.) Moench] treatments were installed in box lysimeters under greenhouse conditions. Treatments comprised increasing rates (0, 1.5, and 3.0 Mg ha -1) of topdressed or incorporated biochar supplemented with N fertilizer or N, P, and K fertilizer. Simulated rain was applied at 21 and 34 d after planting, and mass runoff loss of N, P, and K was measured. A mass balance of total N, P, and K was performed after 45 d. Returning 3.0 Mg ha -1 of biochar did not affect sorghum biomass, soil total, or Mehlich-3-extractable nutrients compared to control soil. Yet, biochar contributed to increased concentration of dissolved reactive phosphorus (DRP) and mass loss of total phosphorus (TP) in simulated runoff, especially if topdressed. It was estimated that up to 20% of TP in topdressed biochar was lost in surface runoff after two rain events. Poor recovery of nutrients during pyrolysis and excessive runoff loss of nutrients for topdressed biochar, especially K, resulted in negative nutrient balances. Efforts to conserve nutrients during pyrolysis and incorporation of biochar at rates derived from annual biomass yields will be necessary for biochar use in sustainable energy crop production.