To understand the contemporary process of desertification in the Mu-Us Sandy Land, China, we assessed the current status of desertification from satellite images. We analyzed the effect of land use by comparing desertification images and GIS-based thematic data. Socioeconomic factors were studied through interviews with local people. The desertified area ratio in each village was related to the sand dune ratio. Desertification in this region was affected by the activity of sand dunes. The revegetated area ratio had a close relationship with the cropland ratio. The development of cropland and surrounding woods contributed to revegetation of desertified land. Desertified areas were distributed mainly in pastoral regions. Critical carrying capacity of grassland for sheep and goats was approximately 2 head/ha. High population density of goats was evident in the severely desertified ranges. Goats were increasingly introduced to earn money through modernization, but they overgrazed fenced pastures. Further environmental education is needed to promote sustainable land use.