This study describes changes in species diversity and canopy cover in relation to variation in livestock grazing in a semi-arid area in Inner Mongolia, China. Canopy cover for each species was recorded 2 and 3 years after cessation of livestock grazing, as well as in an area with continued grazing. Total species richness, alpha diversity, beta diversity and canopy cover were analysed. Sixty species were recorded during the study; 25 of them were annuals. The total number of species was the same, 52, in the grazed and the protected area, but species richness and alpha diversity per plot were lower in the area protected from grazing. The beta diversity showed little difference between the protected area and the grazed control. The total canopy cover was highest in the protected area, but the cover of annuals was higher in the grazed area. In CA ordination, the difference between treatments increased with time of protection. However, in the short period covered by this study it was difficult to separate the effects of protection from grazing and fluctuation in weather conditions, particularly of precipitation.