As the ecological barrier of a lake environment, lakebanks with plant/soil/microorganism systems play roles in runoff sink function. However, without proper control, the pollutants absorbed by plants can remain in plant litter and return to the water body in the plant fall season, resulting in secondary pollution. To reuse plant litter and further enhance the ecological function of lakebanks, in this study, plant litter was collected to produce biochar, which was incorporated into the lakebank soil in a microcosm. Then, the results and mechanisms of nitrogen (N) interception/removal by biochar-amended soil (biochar-based lakebank) were examined in the plant fall season (December–February) and growth season (June–August), respectively. The results showed that: (1) in both plant fall and growth seasons, the biochar-based lakebank exhibited higher total nitrogen (TN) and nitrate N (NO3−-N) removal efficiency from runoff than natural lakebank, especially in the plant growth season; (2) in the plant growth season, the TN removal efficiency of biochar-based lakebank increased by 32.85%, 12.00%, and 18.97%, and NO3−-N removal efficiency increased by 218.19%, 67.22%, and 85.91% under low, medium, and high influent pollution loads, respectively, when compared with those of natural lakebank; and (3) biochar amendment into soil promoted plant growth and increased the abundance of microorganisms related to the N cycle such as nitrobacteria, nitrifying bacteria, and aerobic denitrifying bacteria, which can further enhance the ecological function of lakebank in N removal from runoff.