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• The relationship between the groundwater depth and grassland ecology was analysed; • Groundwater depth affected the composition and diversity of vegetation species; • A reasonable groundwater depth can buffer the impact of climate change on the vegetation to maintain grassland ecological stability; • The control of grassland degradation should include the potential exploitation of groundwater. Grassland degradation in the semiarid area of China is often attributed to overgrazing and expansion of irrigated agriculture without the consideration of groundwater. However, falling groundwater levels in the region have caused many problems for grassland ecology. In this paper,the typical sandy grassland- the Tongliao part of Horqin grassland was selected as the study area to study the spatial distribution of normalized difference vegetation index (NDVI) and the relationship between the NDVI and groundwater depth (GD) of each grassland pixel was studied. The temporal variation of the NDVI and its correlations with precipitation were investigated. The relationship between GD and vegetation species diversity in grassland was analyzed based on the vegetation survey. The results of the relation between GD and NDVI and vegetation species showed that GD can buffer the impact of increase in drought events on the vegetation because GD affected the composition and diversity of vegetation species. As the GD increases, the mean NDVI showed a trend of increasing first and then decreasing, and basically remained unchanged when the GD was greater than 3.5 m. The species diversity of grassland decreased with increasing GD and was not related to GD when GD was greater than 3.5 ∼ 4 m. Falling groundwater levels will cause great changes in the structure of grassland; specifically, azonal vegetation will gradually die and 3.5 m may be the critical GD needed to maintain the incomplete extinction of grassland azonal vegetation in the aeolian sandy soil. Correlation analysis proved that the correlation between NDVI and precipitation was significantly enhanced when GD increased sharply from 3 m to 6 m after 1999. This research indicates that the control of grassland degradation should pay attention to controlling the groundwater exploitation to recover a reasonable groundwater level, which was found to be necessary in the support of diverse and climate resilient of vegetation. [ABSTRACT FROM AUTHOR]