Exogenous C application can improve the physicochemical properties and fertility of soil. This study was conducted to determine whether the application of biochar (BC) was better than straw for improving soil structure and crop growth. The short‐term effects of exogenous C application on the size distribution of water‐stable aggregates, organic C sequestration, and grain yield of winter wheat (Triticum aestivum L.) were investigated on a silty clay loam soil in the Guanzhong Plain, Northwest China. Biochar and straw were applied at equal C rates: 1, 3, and 10% in straw treatments (Str1.0, Str3.0, and Str10.0, respectively) and 0.8, 2.4, and 8% in BC treatments (BC0.8, BC2.4, and BC8.0, respectively). No‐C treatment (CK) was used as the control. The mass proportion of macroaggregates (>0.25 mm) was increased by 16.9% in BC2.4 and 45.8% in BC8.0, and soil organic carbon (SOC) was increased by 13.2 to 155.1% on average in the BC treatments when compared with CK. A small quantity of BC (0.8 and 2.4%) increased microbial biomass C content but decreased dissolved organic C content, while a large quantity of BC (8%) had the reverse effects. Wheat yields were increased by 14.9 and 19.1% in BC0.8 and BC2.4, respectively, while they were decreased by 37.3 and 90.1% in Str3.0 and Str10.0, respectively, when compared with CK. Moderately heavy soil BC amendment (e.g., applied rate, 2.4%) is beneficial to soil structure improvement and wheat growth and effective for harmless disposal of excess plant residues in the Guanzhong Plain, Northwest China.Core Ideas Biochar addition enhanced macroaggregate formation and microaggregate agglomeration. Biochar particles mostly existed in the macroaggregate (>0.25 mm) fractions. Low and moderate biochar application at 0.8% and 2.4% increased microbial biomass C and wheat yield. Heavy straw application at 3% and 10% inhibited wheat growth and yield increase.