The changes in the photoconductivity of hydrogenated tetrahedral amorphous carbon (ta-C:H) with nitrogen incorporation were studied. Low level nitrogen incorporation improves the photoconductivity, by shifting the Fermi level upwards in the band gap. Films with a photosensitivity of about 200 at room temperature under white light illumination of 35 mW/cm2 were obtained; thus is the highest value so far reported for diamond-like carbons. At high temperatures, photoconductivity is controlled by nonradiative recombination through gap states, whereas at low temperatures it occurs by energy-loss hopping in the band tails. Nitrogen addition does not create extra charge defect recombination centers. Low temperature photoconductivity allows the direct determination of the localization radius of the band tail states. This radius varies from 2–3 Å in ta-C:H to 9 Å in ta-C. This illustrates how hydrogen can increase state localization and the photoluminescence efficiency in amorphous carbons.