The Bashang area, located in the semiarid agropastoral zone, represents a typical degraded ecosystem under intensified human activities. This region has undergone profound land use changes during the past century. Natural grasslands had been progressively cultivated, and subsequently, part of cultivated lands had been abandoned by farmers due to severe desertification. In this study, we collected soil samples (0–20 cm depth) from four farmlands on both flat and gentle slope lands where cultivation had occurred for 0, 8, 30, and 50 years to assess the effects of grassland cultivation on soil degradation. In addition, soil samples were taken and plant species were investigated from eight sites in age sequence of 0- to 50- year-old abandoned field to assess natural restoration process following field abandonment. The results showed that cultivation of grassland result in a significant soil degradation which is manifested by the coarsening in soil texture and the losses in organic C and nutrients. After 50 years of cultivation, soil organic C, total N, and total P concentrations had declined 73–79%, 60–70%, and 67–68% in the 0–20 cm plough layer, respectively. Over half of these losses occurred during the first 8 years of cultivation, and subsequent was slow. After fields were abandoned, vegetation got self-restoration, and plant species composition moved toward that of the natural grassland community with time. Soil organic C, total N, and total P levels gradually improved with increasing years of land abandonment, with a faster restoration rate in the early vegetation recovery stage and a slower rate in the late succession stage. The results suggested that soil degradation may occurred drastically by inappropriate land use and management with a short time, while soil restoration for a degraded ecosystem may take long period of time, especially in this fragile ecosystem. From the perspective of soil resource management and desertification control, conservational tillage and management for farmlands and proper grazing management for recovered grassland should be taken into account in this area.