Background and aims <p>Shrub expansion is widespread in global grasslands, with shrubs positively influencing soil microbial abundance compared to surrounding interspaces. However, how this effect varies under grazed and ungrazed treatments remains unclear.</p> Methods <p>In this study, we examined variations in plant and soil properties, as well as soil microbial abundance, between shrub patches (<i>Caragana microphylla</i>) and adjacent interspaces in paired grazed and ungrazed plots at three sites in semiarid grasslands on the Mongolian Plateau.</p> Results <p>Our results showed that shrubs significantly enhanced plant and soil functions, as reflected by increase in canopy height, plant cover, aboveground biomass and soil nutrient concentrations. However, the positive effect of shrubs on soil microbial abundance was observed only under grazed conditions, primarily mediated through aboveground biomass and soil nutrients. Although grazing reduced plant and soil functions, as well as soil microbial abundance, it amplified the relative advantages of shrubs. Notably, fungal abundance responded more strongly to shrubs than bacterial abundance under grazing, leading to a significantly higher fungi-to-bacteria ratio.</p> Conclusion <p>These findings highlight the crucial role of shrubs in buffering grazing–induced environmental stress and provide new insights into shrubs’ effects on plant and soil responses to human disturbances in semiarid grasslands.</p>