This study was executed to explore soil redistribution and soil quality changes induced by land degradation and then rehabilitation by orchard plantation in different slope positions in a semi-arid region in central Iran. A total of 72 surface soil samples (0–30 cm) were collected from three land uses (natural rangelands, dryland farming, and apple orchards) in four slope positions (shoulder, backslope, footslope, and toeslope). The soil physicochemical properties and magnetic parameters were measured, and soil redistribution was determined in the selected soil samples using the 137Cs technique. The results showed that rangeland degradation and, subsequently, rainfed cultivation, led to a significant decline in the soil quality indicators, such as soil organic matter (SOM), total nitrogen (TN), available potassium (Kava), and available phosphorous (Pava), thus incurring further soil loss, as determined by the 137Cs technique. Conversely, the conversion and rehabilitation of drylands to apple orchards cultivated on the contour terraces improved soil quality significantly and decreased soil loss (p < 0.05) and soil quality grade (p < 0.01). Additionally, the findings indicated that slope positions relative to land use change had a reasonable impact on the variability of soil properties and soil loss and deposition. The results of 137Cs analysis showed that the drylands had the highest soil loss (185.3 t ha−1 yr−1) and maximum sedimentation (182. 5 t ha−1 yr−1) in the shoulder and footslope positions, respectively. The random forest model applied between 137Cs inventory and soil properties indicated that calcium carbonate equivalent (CCE), TN, Pava, Kava, and bulk density (ρb) could explain 75% of the total variability in 137Cs inventory with high R2 (0.94) and low RMSE (111.29). Magnetic measurements have shown great potential as a cost-effective and fast method for assessing soil redistribution in hilly regions, as confirmed by the findings of the 137Cs analysis, which agreed well with the magnetic susceptibility at low frequency (χlf). Overall, the results confirmed that restoring abandoned dryland by orchard cultivation may improve soil quality and diminish soil loss in the semi-arid region of Iran. However, further research is required to assess other aspects of the ecosystem affected by this restoration.