Little is known about the role of vegetated hillslope sediment transport in the soil C cycle and soil-atmosphere C exchange. We combined a hillslope sediment transport model with empirical soil C measurements to quantify the erosion and temporal storage of soil organic carbon (SOC) within two grasslands in central California. The sites have contrasting erosional mechanisms: biological perturbation (Tennessee Valley (TV)) versus clay-rich soil creep (Black Diamond (BD)). The average SOC erosion rates from convex slopes were 1.4--2.7 g C m-2 yr-1 at TV and 5--8 g C m-2 yr-1 at BD, values that are <10% of above ground net primary productivity (ANPP) at both sites. The eroded soil accumulates on depositional slopes. The long term SOC accumulation (or C sink) rates are ~1.9 g C m-2 yr-1 in the TV hollow and 1.7--2.8 g C m-2 yr-1 in the BD footslope. We found that the hillslope C sink is driven primarily by the burial of in situ plant production rather than preservation of eroded SOC, a finding that differs from existing hypotheses. At TV, the net sequestration of atmospheric C by long-term hollow evacuation and refilling depends on the fate of the C exported from the zero order watershed. This study suggests that erosion and deposition are coupled processes that create a previously unrecognized C sink in undisturbed upland watersheds, with a potential to substantially affect the global C balance presently, and over geological timescales.