Grazing can affect plant community composition and structure directly by foraging and indirectly by increasing wind erosion and dust storms and subsequently influence ecosystem functioning and ecological services. However, the combined effects of grazing, wind erosion, and dust deposition have not been explored. As part of a 7-year (2010–2016) field manipulative experiment, this study was conducted to examine the impacts of grazing and simulated aeolian processes (wind erosion and dust deposition) on plant community cover and species richness in a temperate steppe on the Mongolian Plateau, China. Grazing decreased total cover by 4.2%, particularly the cover of tall-stature plants (> 20 cm in height), but resulted in 9.1% greater species richness. Wind erosion also reduced total cover by 17.0% primarily via suppressing short-stature plants associated with soil nitrogen loss, but had no effect on species richness. Dust deposition enhanced total cover by 5.7%, but resulted in a 7.3% decrease in species richness by driving some of the short-stature plant species to extinction. Both wind erosion and dust deposition showed additive effects with grazing on vegetation cover and species richness, though no detectable interaction between aeolian processes and grazing could be detected due to our methodological constraints. The changes in gross ecosystem productivity, ecosystem respiration, and net ecosystem productivity under the wind erosion and dust deposition treatments were positively related to aeolian process-induced changes in vegetation cover and species richness, highlighting the important roles of plant community shifts in regulating ecosystem carbon cycling. Our findings suggest that plant traits (for example, canopy height) and soil nutrients may be the key for understanding plant community responses to grassland management and natural hazards.