Cultivation and overgrazing are widely recognized as the primary causes of desertification of sandy grassland in the semi-arid region of northern China. Very little is known about the effect of cultivation and overgrazing on soil physical, chemical and biological properties in this region. The objective of this study was to quantitatively evaluate the magnitude of changes in soil properties due to 3 years of cultivation (3CGS) and 5 years of ungrazed exclosure (5RGS) in a degraded grassland ecosystem of the semi-arid Horqin sandy steppe. Short-term cultivation resulted in a 18-38% reduction in concentration of soil organic C, and total N and P in the 0-15cm plow layer. Cultivation had a significant influence on N and P availability and soil biological properties, with lower basal soil respiration (BSR) and enzyme activities than the grassland soils. This was mostly due to strong wind erosion when sandy grassland was cultivated. Data indicated a considerable difference in soil particle size distribution between the cultivated and grassland soils, and fine fraction (<0.1mm) in the cultivated soil was lower than that in the grassland soils. Moreover, grassland vegetation recovery in the 5RGS resulted in significant improvement in soil properties measured at the 0-7.5cm depth. From the perspective of soil resource management and environmental conservation, a viable option for these sandy grasslands would be to stop conversion of grassland to cropland and adopt proper fencing practices to limit overgrazing.