To determine the role of grazing on CO₂ fluxes in a desert steppe, we used paired eddy-covariance systems to measure the net ecosystem exchange (NEE) and microclimate on adjacent pastures of grazed (GS) and ungrazed (FS) steppes on the Mongolian Plateau from 2010 to 2011. The first year was an average precipitation year, while the second year was a dry year. In 2010, there was 91% greater growing seasonal gross ecosystem production (GEP) and 55% greater ecosystem respiration (Re) in the GS than in the FS. As a result, the GS acted as a net carbon uptake of −20 g C m⁻² while the FS was a small net carbon release of 10 g C m⁻². The greater GEP was mainly caused by the greater photosynthetic capacity due to the suitable environmental conditions and longer growing time in a day and in the growing period accompanied by the enhanced Re that seemed to be responsible for the increased NEE, which compensated for the lower leaf area in the GS. However, an inverse trend was detected in 2011. The seasonal cumulative GEP, Re and NEE were characterized with 92% greater GEP and similar Re in the FS compared with the GS. As a result, the FS acted as a small net carbon uptake of −5 g C m⁻², while the GS was a net carbon release of 59 g C m⁻². Although the GS had greater carbon uptake in 2010, the variation of daily NEE from both years was lower in the FS, suggesting that the FS has a greater resistance to the changing climate. This also means that future modeling effort should consider year-to-year differences in the carbon balance because relationships between fluxes and climatic regulators change annually in different land use change scenarios.