In Hungary more than one-third of agricultural land is affected by water erosion; 16% by wind erosion. The role of gully erosion has been recognized only lately. The main factor of gully erosion risk is soil parent material, i.e. unconsolidated sediments, mainly loess covering two thirds of the country area. The objective of the paper is to review the environmental factors of gully erosion risk based on a country-wide survey and cadastre of the areas endangered by gully erosion. Five pilot areas were selected to study the effects of various environmental conditions in detail. The results include statements on the possible natural and anthropogenic causes of gully initiation and development and risk assessments for the future. The main conclusion is that land use planning should ensure a minimum risk of gully erosion with special emphasis on afforestation.