Steppes on the Mongolian Plateau, mainly within the Republic of Mongolia and the Inner Mongolia Autonomous Region (IMAR) of China, have been subjected to widespread degradation as a result of climate change and human utilization. Field experiments and long-term observations suggest that the productivity of degraded grassland ecosystems might show greater instability, i.e. stronger interannual variation in vegetation activities, when driven by climate change. However, it remains unknown whether this hypothesized destabilization of steppe vegetation activity has occurred in the past three decades and how this destabilization has fed back to livestock production on the plateau. Herein, we define temporal instability of vegetation activity using three indicators, the start and end of the growing season as indicated by the normalized difference vegetation index (NDVI) and the mean growing-season NDVI, and examine their trends between 1983 and 2015. Our results show a significant destabilization of vegetation activity over a large proportion of the total steppe area. Compared with the IMAR, vegetation destabilization has occurred to a significantly higher extent in Mongolia. Climate warming, drying and interannual climate variability accounted for approximately 60%–80% of the vegetation destabilization. The destabilization of steppe productivity was significantly associated with the interannual variability of livestock production in Mongolia, while the interannual variability of steppe productivity and livestock production were decoupled in the IMAR. Our findings highlight the need to improve livestock production systems and conserve degraded grasslands for sustainable development in view of the destabilization of steppe productivity on the Mongolian Plateau.