Abstract: Maqu grassland, belong to Maqu County, Annan Prefecture, Gansu Province, China and located at eastern fringe of Qinhai-Tibet Plateau, is important to the water supply area of Yellow River, but grassland desertification in the region had an vicious effect on this function. This paper aims at the problem of grassland degradation in Maqu pasture, quantitatively analyses reasons for the grassland degradation from natural and artificial factors by applying Cobb-Douglass production function, concludes that the artificial factors are the main reason to cause grassland degradation. The paper further analyzes the artificial factors from three aspects of the raw material model of animal husbandry, operations management system and implementation mechanism, and considers that the institution is the root reason of grassland degradation by applying the method of Chow breakpoint test. The relationship between the institution of grassland property right and overgazing is consanguineous, and the design of the institution of property right is faultiness and institution provided is lagging, which makes utilization and protection of grassland outoforder, tempts herd to overmanage grassland, and leads grassland to be overgrazed over long time. For the existent problems,the paper explores sustainable model of production, operation and management by environmental opportunity, and proposes the sustainable development models of ecocultural tourism, partnerships system and government management and religious propaganda combined. By optimizing development model to realize virtuous circle between the economic development and grassland ecology，it provides references for other plateau pastoral areas of animal husbandry economic development.

Key words: grassland degradation, the raw material model of animal husbandry, Maqu