Prior studies indicate that the semantic radical in Chinese characters contains category information that can support the independent retrieval of category information through the lexical network to the conceptual network. Inductive reasoning relies on category information; thus, semantic radicals may influence inductive reasoning. As most natural concepts are hierarchically structured in the human brain, this study examined how semantic radicals impact inductive reasoning for hierarchical concepts. The study used animal and plant nouns, organized in basic, superordinate, and subordinate levels; half had a semantic radical and half did not. Eighteen participants completed an inductive reasoning task. Behavioural and event-related potential (ERP) data were collected. The behavioural results showed that participants reacted faster and more accurately in the with-semantic-radical condition than in the without-semantic-radical condition. For the ERPs, differences between the conditions were found, and these differences lasted from the very early cognitive processing stage (i.e., the N1 time window) to the relatively late processing stages (i.e., the N400 and LPC time windows). Semantic radicals can help to distinguish the hierarchies earlier (in the N400 period) than characters without a semantic radical (in the LPC period). These results provide electrophysiological evidence that semantic radicals may improve sensitivity to distinguish between hierarchical concepts.