This paper analyses grassland dynamics in china from 1995 to 2000 under different aridity based on RS and GIS to discover the rule in it. The results show that the amount of grassland is reduced to 5.49 x104hm2. There is heavy grassland degradation in arid region, especially at low cover grass. The mainly change is becoming farmland and grassland and grass resource having different degree degeneration. The driving force of grassland dynamic is mainly natural and human activities. The main reason of grassland changing into farmland is population pressure; grassland degradation is caused by over graze etc. Because grassland lies in west and north of china, its area reduction and grass cover decrease will lead to china north environment worsen. Moreover the grassland decrease will restrict region economy development.