Participatory appraisal method was adopted to investigate the recent livelihood status of different type farmers and herdsmen's households in the Taipusi Banner of Inner Mongolia agriculture- animal husbandry ecotone, aimed to understand their livelihood strategies and restricting factors and to search for the ways to improve their living standards. The households dealing with pure agricultural production had smaller family size, with older age-structure and lower educational level, and their simple livelihood strategies brought about larger vulnerability and risk. To introduce and expand non-agricultural activities would be the important way to promote the livelihood diversification and to reduce the livelihood risks of these households. The households dealing with pure animal husbandry took grazing as the main subsistence, and their production activities were greatly restrained by the pasture vulnerability. To develop environment-friendly and high-yielding agriculture and animal husbandry would be the effective way to solve the livelihood problems of these households and to protect the ecological environment. The households dealing with both agricultural production and business or dealing with both animal husbandry and business generally had larger family size, with younger age- structure, higher diversity in labor division, larger proportion of non-farming activities, and better living standards. Especially for the households dealing with both animal husbandry and business, their income was much higher.