AbstractSpecies abundance distributions (SADs) have been the focus of many ecological studies. Understanding the causes of SAD patterns is a major stepping stone toward understanding of how ecological communities are organized. While SAD patterns have been well studied in marine environments and forests, knowledge of SADs in response to environmental or human‐induced gradients is limited, especially in desert environments. In this study, we used structural equation modeling to analyze the effects of grazing disturbance and climate on plant SADs in a desert steppe of Inner Mongolia, China, aiming to shed light on the assembly of plant communities in this region. We found both grazing disturbance and climate influenced SADs but through different pathways and with different magnitude. Grazing intensity affected SADs by reducing evenness and richness of common species, while increases in annual mean temperature and annual rainfall affected SADs by increasing richness of rare species. Climate had 30% greater effect on community structure than grazing disturbance, highlighting the role of climate in community assembly in desert environments where biological processes are highly constrained by water. We further found geometric series was associated with low annual rainfall and low richness, and log‐normal with high annual rainfall, high richness and evenness. Geometric best fit for majority of the cases (60%) regardless of grazing intensity suggesting niche differentiation on the local scale is the principal community assembly process operating in the study region. Environmental filtering and niche differentiation may be concurrently operating to structure plant communities in this region.