In combination of field investigation with laboratory analysis, changes of plant community and soil characteristics were studied under different degrees of desertification in Yanchi desertification grassland to investigate the responses of vegetation and soil to desertification. Vegetation composition changes with the increased degree of grassland desertification. Perennial species gradually gave place to psammophyte annuals. Diversity index increased from mild desertification to moderate desertification grasslands. From moderate to extreme desertification grasslands, diversity index first decreased and then increased, which shows that the stage of moderate desertification is an important turning point for changes in plant community characteristics. Soil water content, organic matter and nitrogen content were reduced with increased sandy desertification on grassland; available P and available K content were the highest in extreme desertification stage, and changes of pH value and salt content did not show an obvious trend.