Objective Severe soil erosion and water leakage on dry slopes of red soils are a common phenomenon that results in significant nitrogen loss. These occurrences cause nitrogen imbalance and subsequent yield losses. This study aimed to explore the effects of different levels of reduced nitrogen fertilization on crop yield and nitrogen loss characteristics.Method Randomized field trials comprising of five nitrogen treatments in three replicates were set up in peanut fields located in the dry slopes of northern Jiangxi characterized by red soils. The five treatments were 100% nitrogen application rate (N_100%, pure nitrogen application of 180 kg·hm^–2), 1/6(N_1/6), 1/3(N_1/3), 1/2(N_1/2), and zero (N₀) nitrogen application rates.Result The peanut yield and plant nitrogen uptake of N_1/2 and N_1/6 treatments were insignificantly lower than those of the N_100% treatment (P > 0.05). Besides, N_1/6 and N_1/2 treatments had no significant differences in agronomic characteristics such as the main stem length, plant height, crown width, number of full fruits, and the number of original branches (P > 0.05). N_1/6, N_1/3, N_1/2, and N₀ treatments significantly reduced the average total nitrogen (TN) concentration in the surface runoff by 14.36%, 26.35%, 14.01%, and 21.34%, respectively, compared to the N_100% treatment (P < 0.05). Also, N_1/3, N_1/2, and N₀ treatments reduced the average TN concentration in the leakage compared to the N_100% treatment. However, the average increase in TN leakage concentration in the N_1/6 treatment was not significantly different from that of the N_100% treatment (P > 0.05). The nitrogen output from the peanut planting system ranged between 34.95 and 93.98 kg·hm^–2. Nitrogen losses from runoff and leakage ranged between 38.31% and 70.50%, while other apparent nitrogen losses such as gaseous losses ranged between 29.50% and 60.63%.Conclusion This finding affirmed the significance of nitrogen loss through runoff and leakage. Non-nitrogen treatment on newly reclaimed land reduced the soil inorganic nitrogen while reduced-nitrogen fertilization increased the soil inorganic nitrogen by up to 18.66%-31.44%. Thus, reduced nitrogen fertilization could maintain a constant soil fertility level. Based on the comprehensive production goals, environmental impacts, and soil fertility, 90 kg·hm^–2 is the recommended nitrogen application rate for peanuts planted in dry slope land with red soils.