This study aimed to investigate the effects of replacing alfalfa with native grass on growth performance, meat quality, and rumen microbiota of lambs. Forty-five 6-month-old Ujimqin lambs with live body weight (BW) of 29.50 ± 0.26 kg were used for the experiment, and the lambs were assigned to three diet treatments (three pens per treatment and five lambs per pen) with 30 square meters per pen in semi-open housing based on similar BW. The lambs have received 30% alfalfa (HA, high alfalfa percentage group), 20% alfalfa (MA, moderate alfalfa percentage group), and 10% alfalfa (LA, low alfalfa percentage group) diets, respectively (dry matter basis). The diet treatments had a significant (P < 0.05) influence on the dry matter intake of lambs and the dry matter intake increased with the increasing percentages of native grass hay, while the significantly (P < 0.05) lower final BW and average daily gain were observed in the MA and LA groups compared with that in the HA group. The diet had a significant (P < 0.05) difference in meat pH value, water loss rate, cooked meat rate, moisture, and intramuscular fat, while no significant (P > 0.05) difference was found in protein. As native grass hay percentages increased in the diet, the contents of palmitic (C16:0) and palmitoleic (C16:1 cis-9) in the HA and MA groups were significantly (P < 0.05) lower than that in the LA groups, and compared with the HA group, the contents of elaidic (C18:1 trans-9), oleic (C18:1 cis-9), and linoleic (C18:2 cis-9–cis-12) were significantly (P < 0.05) increased in the MA and LA groups. The content of α-linolenic (C18:3n3) was significantly (P < 0.05) higher in the LA group than that in the HA and MA groups. The principal coordinate analysis profile displayed that the composition of the bacterial community of these groups was distinctly separated from each other. No significant (P > 0.05) difference was observed in the dominant rumen bacteria at the phyla and genus levels. In conclusion, the meat quality and fatty acid profile analysis revealed that replacing alfalfa hay with native grass hay is more beneficial for Mongolian lambs, and the meat from LA diet treatment is better than the others. In addition, correlation analysis of the association of rumen microbiome with growth performance, meat quality, and fatty acid profile provides us with a comprehensive understanding of the composition and function of rumen microbiota. These findings could provide knowledge of how the diet affects the animal performance, meat quality of lambs, and microbiota of the rumen, laying a theoretical basis for replacing alfalfa with native grass.