In 494, when Emperor Xiaowen moved the capital from Pingcheng (平城, in modern Datong, Shanxi) to Luoyang as a major part of sinicization campaign, Tuoba Xun accompanied his father south.
From this point on, whenever Emperor Xiaowen conducted campaigns against rival Southern Qi, Yuan Xun would often be formally in charge of the capital, although high-level officials were actually responsible for important matters.
In fall 496, while Emperor Xiaowen was away from the capital, Yuan Xun, unable to endure the heat in Luoyang, made an impulsive decision to seize horses and flee with his attendants to Pingcheng.
About one and a half months later, Emperor Xiaowen deposed Yuan Xun and demoted him to commoner rank, changed his courtesy name to Xuandao and put him under house arrest with minimal supplies.
However, the official Li Biao (李彪), in charge of guarding him, then made a false report to Emperor Xiaowen that Yuan Xun was still plotting with his attendants.