Arbuscular mycorrhizal (AM) fungi may have some potential use in the restoration of degraded grassland through beneficial effects on plant growth and soil quality. A field investigation was conducted in three grassland sites of typical steppe in Inner Mongolia. The three plant communities, one of which was undegraded, one moderately degraded and the third severely degraded, were studied by collecting soil samples and samples of four plant species that occurred in all three sites. The percentage of root length colonized by AM fungi was estimated and the species composition and diversity of AM fungus spores recovered from the soil were determined using spore morphological characteristics. Although differences between the sites may have been due partly to other factors, it is likely that the degree of degradation was an important factor. No decline was found in the AM colonization of the roots of the indicator plant species in the moderately or severely degraded plant communities, and two plant species showed higher colonization status in the two degraded areas. Glomus geosporum and Scutellospora calospora were the dominant AM fungi in the undegraded steppe, while G. geosporum and Glomus aggregatum dominated the two degraded sites which also had low spore densities, species richness and diversity indices. However, different AM species showed different distributions among the three plant communities and the results indicate that both biotic and abiotic factors were important in determining the AMF communities, with biotic factors possibly the more important.