The grassland is the largest terrestrial ecosystem in the world. How to manage and maintain grassland ecosystem functionality is becoming a critical issue as grasslands face serious degradation under the increasing pressures of global change. Livestock grazing is one such pressure, and it is the most widespread land use on Earth. Here, we explore theories and empirical evidence regarding how diversifying grazing livestock species and breeds could potentially improve grassland ecosystem multifunctionality. First, livestock grazing has been known to affect grassland multitrophic biodiversity, and thereby ecosystem multifunctionality. Different livestock species, such as cattle and sheep, vary in their foraging mode, diet, trampling effect and movement as well as in the quantity, distribution, and chemical composition of their excreta deposited in grasslands. As a result, diversity in livestock grazers leads to a variety of disturbances, higher landscape heterogeneity and more varied niches for plants, insects and soil organisms to inhabit. Therefore, diversity in grazers promotes higher overall ecosystem biodiversity. Second, livestock is an important dispersal agent for plants because they reduce intraspecific competition, minimize loss of genetic diversity and mitigate inbreeding. This leads to a more viable and diverse plant population. Third, diverse livestock species in natural grassland ecosystems may ecologically replace large-bodied and extinct native herbivores, and they certainly directly increase herbivore diversity, in grassland ecosystems. Finally, when a variety of livestock species or breeds grazes in the same grassland, it can lead to complex multi-species interactions. These interactions can be attributed to different nutritional demands and selections, and they thus greatly enhance trophic complexity and ecosystem functioning. At its core, the theory of diversifying livestock grazing aims to choose herbivores with different morphological, physiological or behavioral characteristics to thereby exert diverse disturbance on grasslands, rather than a single stressor. These diversified groups of livestock could comprise animal species of different functional groups, such as grazers and browsers, different species of the same functional group, or even different breeds of the same species. The greater the morphological, physiological and behavioral differences among livestock, the more sustainable is the grazing. Further, this diversity can also be created by adjusting the relative abundance of each species or variety, or by adopting one of two grazing modes; where all livestock graze in the same grassland at the same time (i.e., mixed grazing), or at different times (i.e., alternate grazing). In conclusion, altering livestock species composition and grazing intensity may improve grassland ecosystem functioning. We suggest that the ecological effects of grazing by diversifying livestock species and breeds should be empirically tested across different grassland types worldwide, and each specific mode of diversifying livestock grazing should be explored in turn. Future studies should test the following key questions: (1) Can altering the proportion or grazing sequence of different livestock species help achieve optimal grazing by multiple livestock species? (2) How do introduced diverse livestock interact with native herbivores? (3) Can diverse livestock be used as a long-term ecological substitute for large wild herbivores to maintain grassland ecosystem functioning?