The overexploitation of Grasslands without any return-back and compensation is the major cause of degradation and deterioration of the grassland ecosystem. The Subsidy and Incentive System for Grassland Conservation (SISGC) in China aimed to restore grassland ecology by the reduction of overgrazing, promoting carrying capacity, and increasing alternative employment of herders in non-husbandry sectors. However, the ecological response to the SISGC still remains unclear on the national scale. Here, we used systematic sampling, and satellite image time series data revealed a widespread proliferation of major ecological indicators for grasslands, contrasting climate and actual net primary productivity (NPP) before (2004–2010) and after (2011–2017) the implementation of SISGC founded the contributions to policy, as simulated by the Carnegie-Ames-Stanford-Approach (CASA) model. On average, by two-phase comparison, the actual grassland NPP increased by 11.72%. The contribution of policy implementation and climate factors increased grassland NPP by up to 61.14% and 38.86%, respectively, but the response of the NPP growth of various grassland types exhibited divergence, mainly divided into policy-led (contribution rate of 52.28–97.02%) and climate-led (contribution rate of 57.56–96.00%). Hence, the SISGC policies should be renewed for different grassland types.