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Grazing and water availability are the primary drivers of vegetation dynamics in grazing-dominated regions of Mongolia with a semi-arid climate and frequent droughts. Nomadic animal husbandry still plays a large part in the economy of Mongolia, but more variable precipitation regime and increase in livestock number have severely affected grassland ecosystems through overgrazing, leading to pasture degradation. This study aimed to examine the effects of grazing exclusion, interannual variation of plant-available precipitation (PAP) and their interaction on the aboveground biomass (AGB) of each dominant species, the AGB of annual species and the total AGB in a Mongolian dry steppe, using long-term field data.To detect the effect of grazing on vegetation dynamics, vegetation surveys were conducted in a non-grazed exclosure zone and a fully grazed area outside the exclosure. We assessed the effects of grazing, PAP and their interaction on AGB parameters using a generalized linear model. A detrended correspondence analysis (DCA) was used to visualize the effects of grazing and PAP on the AGB of each species.Grazing, PAP and their interaction had significant effects on AGB. The effect of grazing on AGB was larger with higher precipitation and higher amounts of AGB (i.e. forage) while AGB was strongly limited in drought years, which resulted in a smaller grazing effect. The current year PAP had the highest impact (r = 0.88, P < 0.01) on AGB. The dominance of annual species was characterized by the amount of PAP in the current and preceding years: annuals dominated in wet years that followed consecutive dry years. The DCA Axis 1 reflected the variation of AGB with interannual variation of PAP while the DCA Axis 2 differentiated the grazing effect. The DCA scatter diagram based on species score illustrated that Artemisia adamsii (an unpalatable herb) was clearly linked to grazing disturbance whereas palatable perennials such as Agropyron cristatum, Stipa krylovii and Cleistogenes squarrosa were related to grazing abandonment and wetter conditions. In brief, number of livestock, hence the grazing impacts on vegetation dynamic in this region could have driven by forage availability, which is mainly controlled by current-year PAP.