Plateau pikas (Ochotona curzoniae) and plateau zokors (Myospalax baileyi) occur naturally in the alpine meadow of the Qinghai–Tibet Plateau (QTP). Their feeding and burrowing activities affect plant composition and soil properties (e.g., soil carbon accumulation and soil nitrogen cycling), but research to study the complex interactions between small mammals, livestock, and habitat is currently lacking. We conducted a sheep grazing trial to determine the effect of grazing management on pika burrow and zokor mound density, and the relationships between sheep production and pika burrow and zokor mound density. The grazing management approaches were warm‐season rotational grazing at 24 and 48 sheep months (SM)/ha, cold‐season rotational grazing at 24 and 48 SM/ha, seasonal continuous grazing at 24 SM/ha, and whole‐year continuous grazing at 48 SM/ha. The results of this study suggested that warm‐season rotational grazing at low stocking rate did not significantly change both pika and zokor densities. Cold‐season rotational grazing at both high and low stocking rates and seasonal continuous grazing at low stocking rate led to an increase in zokor mound density, but not pika burrow density. Whole‐year continuous grazing at high stocking rate increased both pika and zokor densities. The influence of pika and zokor activities on sheep production was complex and differed between grazing management. Sheep liveweight gain peaked at moderate pika burrow and zokor mound density at low stocking rate under both warm‐ and cold‐season rotational grazing. The threshold values of pika density were about 110 and 70 burrows per hectare in warm and cold seasons, respectively. The threshold value of zokor density was about 400 mounds per hectare in the cold season. In contrast, under high stocking rate regardless of management approach, sheep liveweight gain declined significantly as both pika burrow and zokor mound density increased. This paper provides a theoretical understanding and experimental evidence for sustainable grazing management and restoration of degraded grassland by local herders and policymakers.