Terrace erosion has become increasingly pronounced due to the rising incidence of heavy rainfalls resulting from global climate change; however, the processes and mechanisms governing erosion of loess terraces during such events remain poorly understood. A field investigation was performed following a heavy rainfall event in the Tangjiahe Basin to examine the soil erosion characteristics of loess terraces subjected to heavy rainfall events. The results show that various types of erosion occurred on the terraced fields, including rill, gully, and scour hole in water erosion, and sink hole, collapse, and shallow landslide in gravity erosion. Rill erosion and shallow landslide erosion exhibited the highest frequency of occurrence on the new and old terraces, respectively. The erosion moduli of the gully, scour hole, and sink hole on the new terraces were 171.0%, 119.5%, and 308.7% greater than those on the old terraces, respectively. In contrast, lower moduli of collapse and landslide were observed on the new terraces in comparison to the old terraces, reflecting reductions of 34.2% and 23.4%, respectively. Furthermore, the modulus of water erosion (32,102 t/km2) was 4.5 times that of gravity erosion on the new terraces. Conversely, on the old terrace, the modulus of gravity erosion (8804.1 t/km2) exceeded that of water erosion by 14.5%. Gully erosion and collapse dominated the erosion processes, contributing 67.8% and 9.4% to soil erosion on the new terraces and 38.7% and 34.0%, respectively, on the old terraces. In the study area, the new terraces experienced significantly greater erosion (39,252 t/km2) compared to the old terraces (16,491 t/km2). Plastic film mulching, loose and bare ridges and walls, inclined terrace platforms, and high terrace walls, as well as the developing flow paths, might be the key factors promoting the severe erosion of the terraces during heavy rainfall. Improvements in terrace design, construction technologies, temporary protective measures, agricultural techniques, and management strategies could enhance the prevention of soil erosion on terraces during heavy rainfall events.