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Overgrazing reduces plant species diversity, productivity and soil C and N storage due to degradation especially in arid and semi-arid ecosystems. We hypothesized that fencing could significantly reverse these trends in temperate grasslands. The effects of long-term (30 years) fencing on diversity and soil C and N storage were compared with areas where continuous grazing occurred on the Loess Plateau, China. Fencing increased vegetation coverage, height, plant diversity, biomass production and litter, resulting primarily from increases in the ratio of grass species as a percentage of the whole community and photosynthate allocation between above- and below-ground biomass indicated by differences in the root/shoot (R/S) ratios. Fencing significantly influenced soil bulk density (BD), moisture content (SW) and pH. Long-term fencing also led to marked increases in soil organic carbon (SOC), soil total nitrogen (TN), the carbon: phosphorus (C/P) and nitrogen: phosphorus (N/P) ratios, as well as soil C and N storage within 0-100 cm soil profile. The C/N ratio in the surface 0-5 cm fenced and grazed grasslands were also significantly different. Increases in soil C and N sequestration as a result of fencing occurred mainly at deeper soil depths (30-100 cm). These findings have important implications for both protecting and enhancing the resilience of ecosystems, which have been disturbed by grazing and for developing a more effective grasslands management strategy on the Loess Plateau. (C) 2013 Elsevier B.V. All rights reserved.