The diversity of a degraded grassland community on the Chinese Inner Mongolia steppe dominated by Artemisia frigida (Asteraceae) subject to a range of grazing treatments (zero, and light, medium and heavy grazing) for 13 years was studied from July to August 2002. Under zero grazing, percentage total vegetation cover was significantly (P < 0.05) less than under light, medium, and heavy grazing. Although not dominant in any treatments, percentage cover of Carex duriuscula (Cyperaceae) was higher than other species in the zero, light, and medium grazed treatments. Its cover tended to decline as grazing intensity increased (P = 0.49). Aneurolepidium chinense (Poaceae) reasserted its dominant status in the zero grazed grassland; A. frigida remained dominant under light and medium grazing. Under heavy grazing, Potentilla acaulis (Rosaceae) was the dominant species and it provided the highest percentage cover. Zero and heavy grazing resulted in fewer (three-four) species contributing most of the total cover (cf. six-seven species for light and medium grazing). This was reflected by indices of diversity and evenness, which were highest for light and medium grazing. The Simpson Dominance Index was highest for the zero and heavily grazed treatments, indicating that at the extremes of the grazing spectrum, single species tended to exclude potential co-dominants more effectively than at intermediate levels of grazing. Selective grazing was a key process. Grazing increased the proportion of unpalatable and grazing resistant species, and species that although palatable, were relatively inconspicuous. These findings are discussed in terms of their impact on the productivity and long sustainability of grazing. The need to develop a better understanding of underlying processes, and more sustainable forms of grazing management are highlighted.