Headcut erosion is the main form of gully erosion. Headcut erosion not only causes the loss of land resources and poses a threat to agricultural production but also severely influences the life and work activities of local residents. To clarify the mechanism of headcut erosion in the Dongzhi tableland in China, a combined simulated rainfall–runoff scouring experiment was conducted to study the influences of the headcut height on hydrodynamic process. The rainfall intensity was set as 0.8 mm/min while the flow discharge was 3.6 m3/h. The slope gradient on upstream catchment area was set as 3° and 7°, the slope gradient of gully bed was consistent with the catchment area. The gully head height was 0.9 m and 1.5 m. The experiment time of 3° was 120 min, and the experiment time of 7° was 90 min. The results revealed that the sediment yield at a headcut height of 1.5 m was 1.84—14.78 times greater than that at 0.9 m. When the headcut height was 0.9 m, the sediment yield reached its maximum value during the initial 30 min. Due to the existence of gravity erosion, the sediment yield was similar at a headcut height of 1.5 m under different time periods. In terms of the first-level gully head, the headcut retreat lengths at 0.9 m were 54.72% and 32% of those at 1.5 m. The first-level gully headcut retreat lengths showed a significant power function with the experiment time at 1.5 m and the retreat length was 302 cm at 120 min. These results demonstrate that an increase in the headcut height contributed to a faster gully headcut retreat, resulting in the generation of secondary and tertiary headcuts, which increased the degree of damage to the soil surface. When the gully headcut height was 0.9 m, the flow velocity, Reynolds number, Froude number, shear stress, stream power, resistance coefficient, and unit stream power in the catchment area were slightly greater than those in the gully bed. When the headcut height was 1.5 m, the flow velocity, Froude number, and resistance coefficient in the catchment area were lower than those in the gully bed. The difference in hydraulic parameters increased with the increasing gully headcut height. An increase in the headcut height can greatly increase the turbulence of runoff, leading to the increase in soil erosion. Headcut height was one of the important factors for gully erosion control in this region. These findings have important implications for eco-recovery efforts in the gully region of the Loess Plateau.