Conversion from grasslands to shrublands resulting from overgrazing occurs worldwide and is reinforced by the global climatic change. The functioning, biogeochemical cycles (e.g., carbon and water), and the stability of grassland ecosystems are significantly affected by the conversion. To best manage and use those grassland ecosystems, it is imperative to examine how the shrub‐encroached grasslands can be restored to native grassland ecosystems. In this study, aboveground biomass of all species, root biomass, soil water content, and soil texture in a set of fenced and unfenced plots were observed every three years from 1992 to 2011 in a semishrub encroached grassland on the Ordos Plateau of China. In the fenced plots, aboveground biomass increased for grass species and decreased for semishrub species. Root biomass and soil water content in the 0-10-cm soil layer increased, but decreased in the 10-30-cm soil layers. The fraction of soil particle sizes less than 0.01 mm increased in the 0-10-cm soil layer. In contrast, these variables remained constant in the unfenced plots over the experimental period. The semishrub encroached grassland dominated by Artemisia ordosica was replaced with a native perennial grass, Stipa bungeana , when grazing was eliminated in the fenced plots. Changes in soil texture and moisture after fencing were correlated with the native grassland restoration from semishrub encroached grasslands. This study suggests that, to restore the native grassland, grazing should be eliminated in the study region.