Grasslands in northern China are traditionally important bases for livestock production and ecological barriers for China. However, these grasslands degraded extensively due to global climatic change and poor management during the past half century. Such grassland degradation leads to dramatic declines in multiple ecosystem functions. Here we first analyzed the current status of these grasslands, with emphasizing on production and ecological functions. In general, the capability of annual aboveground biomass production in these grasslands has been greatly impaired in comparison with that in 1980s and not recovered to normal level despite application of some restoration measures. As indicated by large inter- annual variation in grasses production, the capability of feedback regulation to buffer the negative impacts of climatic change was greatly eroded. Carrying capability for animals of grasslands at the national level displayed an increasing trend in recent years, while the actual stocking capacity remained higher than its potential. Total water resources in these grasslands have declined greatly as evidenced by rapid losses of lakes and drying up of rivers. We next reviewed the major measures for restoration and management of grasslands in northern China during the past decades and analyzed their advantages and constrains, respectively. Fencing (prohibition of grazing) has been used in some area, but was difficult to extend to a larger area mainly due to economic reasons. Seasonal grazing and rotational grazing have been recommended by local governments. However, the outcomes of these measures are limited. Tillage and harrowing have also been suggested for restoration of the degraded grasslands, but it has rarely been largely used due to higher costs and inconsistent results. Reseeding grasses and/or legumes in natural grasslands are potentially useful for grassland restoration, but frequent droughts limit its application. Rotational mowing is a good measure for hey production system. Moreover, the yearly shift between grazing and mowing is much better than successive grazing or mowing. Fertilization has often been used in grassland management in most developed countries. However, this measure has not been widely applied in China due mainly to the lack of information on the types, rates and applied methods. Finally, based on our long-term studies on grassland ecology and practices in grassland restoration, especially the demonstration work in Hulunbuir grasslands, we propose some proposition on policy making and development of technical measures related to sustainable management of the grasslands in northern China. Ecological monitoring and evaluation of native grasslands should be done, and local farmers should be compensated for based on the evaluation results. Establishing cultivated pastures with high productivity and quality of forage grasses are key measures for protection and restoration of the degraded natural grasslands. As above-mentioned measures on grassland restoration usually take long time (from several years to decades) to restore the natural grasslands, new technical measures to restore the degraded natural grasslands are urgently needed. This review has important implications for improving the production and ecological functions of natural grasslands in general and for the sustainability of grass-based animal husbandry in particular.