We identified and measured changes in soil characteristics, nutrient availability and microbial activity to a gradient of grazing intensity in the Chaco region of northwestern Argentina (24 degrees 43' S and 63 degrees 17' W). Three sites were selected for comparison: 1. highly restored (no grazing for 20 years); 2. moderately restored (eight years of restoration); and 3. highly degraded (a typical Chaco campesino dwelling, extremely overgrazed). On each sire two sets of soil and litter samples were taken during the dry and wet season, respectively. The following parameters decreased as grazing intensity increased: soil moisture (from 4.58 to 2.25%), organic matter (from 4.68% to 1.45%), and nitrogen content (from 0.28% to 0.14%). Salt content increased from 1.8 to 5.0 d sm(-1). Microbial activity ranged from 0.89 mg CO2 g(-1) 7 day(-1) at the restored sites to 0.22 mg CO2 g(-1) 7 day(-1) at the highly degraded site. The seasonal variations in density and activity of microorganisms increased from the highly restored to the highly degraded site, probably as a response to an increased lack of humidity. The cellulolytic and nitrifier groups were the most affected, whereas the ammonifier and free-living nitrogen-fixing organisms decreased in the highly degraded site only. Nitrogen fixation was more intense at the moderately restored site followed by the highly degraded site. The observed values are interpreted as resulting from the interaction between organic matter availability (as energy source) acid nitrogen deficiency. Our results suggest a strong influence of overgrazing on the soil fertility, as well as on the soil ability to buffer water stress during the dry season. When compared with other savannas of the world, soils at the restored sites show high soil nutrient and organic matter levels, probably as a result of high phosphorous availability resulting from their recent geological origin. (C) 1999 Elsevier Science B.V. All rights reserved.