Climate change and human interference have disturbed most grassland ecosystems globally, causing degradation, fragmentation and loss of landscape. Over-grazing, the main human factor of grassland degradation, challenges most grassland flora and fauna. However, the impact of grazing-caused grassland degradation on communities remains unclear, because of the difficulty and neglect of studying the complex interactions and cascade effects within an ecosystem. Therefore, we studied birds, epigeic arthropods, plants and grazing intensity in the Zoige alpine grassland on the eastern Qinghai-Xizang Plateau to explore the complex interactions and cascade effects on community. We found positive responses of bird abundance and epigeic arthropod to light and moderate grassland degradation. Biomass and abundance of omnivores bird, saprophages and zooparasites arthropod could benefit from human-induced livestock to reverse the expected biome decline under grassland degradation. Yak contributed more to grassland degradation than sheep. Sheep promoted bird diversity, while yak reduced both birds and arthropods, indicating varying influence intensity and pathway of sheep and yak on biome through cascade effects. Our results suggest that grazing-caused grassland degradation benefits birds and epigeic arthropods through the food web and cascade effects, the impact of grazing may depend on feeding habits of grazing species. Therefore, we urge further research to uncover the intricate mechanisms of grassland ecology for the conservation of biodiversity and ecosystem stability.