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Lateral movement of soil organic carbon (SOC) induced by soil erosion and runoff changes spatial distributions of SOC, and further changes the land‐atmosphere CO2 exchange and terrestrial carbon budget. However, current ecosystem models do not or only poorly integrate the process of SOC lateral movement and cannot simulate the impacts of soil erosion on the carbon cycle. This study integrated SOC erosion and deposition processes into a process‐based ecosystem model (i.e., Integrated BIosphere Simulator (IBIS)), and separately simulated the lateral movements of dissolved organic carbon (DOC) and particulate organic carbon (POC). The model was evaluated in three river basins in Northeast China that are dominated by cropland, forest, and grassland. The results showed that the model reproduced well the production, erosion, and deposition of DOC and POC. The annual SOC lateral movement (1.34–7.22 g C m−2 yr−1) induced by erosion in the three tested basins was 0.27%–1.45% of the annual net primary production. The model developed in this study has great implications for simulating the lateral movements of SOC in terrestrial ecosystems, which can improve model performance in projecting the terrestrial carbon budget. Plain Language Summary: Lateral movement of soil organic carbon (SOC) with soil erosion and runoff is an important process in estimating land carbon budget. However, the current ecosystem models are not or poorly integrated this process, and cannot simulate the impacts of lateral movement of SOC on carbon cycle. This study integrates SOC erosion and deposition processes into a process‐based ecosystem model (Integrated BIosphere Simulator (IBIS)), and separately simulates the lateral movements of dissolved organic carbon (DOC) and particulate organic carbon (POC). The model was evaluated at three river basins in Northeast China dominated by cropland, forest and grassland, respectively. The results showed the model can reproduce well the production, erosion, deposition of DOC and POC. The model developed in this study has great implications for simulating the lateral movements of SOC in terrestrial ecosystem, which can improve model performance on projecting terrestrial carbon budget. Key Points: Current ecosystem models inadequately depict the lateral movement of SOC, causing uncertainties in terrestrial carbon cycle modelingWe integrated SOC erosion and deposition into a process‐based ecosystem model and evaluated it in three Chinese river basinsModel simulations well represented observed data for the production, erosion, and deposition of organic carbon [ABSTRACT FROM AUTHOR]