Grasslands, which provide fundamental ecosystem services in many arid and semiarid regions of the world, are undergoing rapid increases in fire activity and are highly susceptible to postfire-accelerated soil erosion by wind. A quantitative assessment of physical processes that integrates fire-wind erosion feedbacks is therefore needed relative to vegetation change, soil biogeochemical cycling, air quality, and landscape evolution. We investigated the applicability of a novel tracer technique—the use of multiple rare earth elements (REE)—to quantify soil transport by wind and to identify sources and sinks of wind-blown sediments in both burned and unburned shrub-grass transition zone in the Chihuahuan Desert, NM, USA. Results indicate that the horizontal mass flux of wind-borne sediment increased approximately threefold following the fire. The REE tracer analysis of wind-borne sediments shows that the source of the horizontal mass flux in the unburned site was derived from bare microsites (88.5%), while in the burned site it was primarily sourced from shrub (42.3%) and bare (39.1%) microsites. Vegetated microsites which were predominantly sinks of aeolian sediments in the unburned areas became sediment sources following the fire. The burned areas showed a spatial homogenization of sediment tracers, highlighting a potential negative feedback on landscape heterogeneity induced by shrub encroachment into grasslands. Though fires are known to increase aeolian sediment transport, accompanying changes in the sources and sinks of wind-borne sediments may influence biogeochemical cycling and land degradation dynamics. Furthermore, our experiment demonstrated that REEs can be used as reliable tracers for field-scale aeolian studies.