Grassland is one of the most widely-distributed ecosystems on Earth and provides a variety of ecosystem services. Grasslands, however, currently suffer from severe degradation induced by human activities, overgrazing pressure and climate change. In the present study, we explored the transcriptome response of Stipa breviflora, a dominant species in the desert steppe, to grazing through transcriptome sequencing, the development of simple sequence repeat (SSR) markers, and analysis of genetic diversity. De novo assembly produced 111,018 unigenes, of which 88,164 (79.41%) unigenes were annotated. A total of 686 unigenes showed significantly different expression under grazing, including 304 and 382 that were upregulated and downregulated, respectively. These differentially expressed genes (DEGs) were significantly enriched in the "alpha-linolenic acid metabolism" and "plant-pathogen interaction" pathways. Based on transcriptome sequencing data, we developed eight SSR molecular markers and investigated the genetic diversity of S. breviflora in grazed and ungrazed sites. We found that a relatively high level of S. breviflora genetic diversity occurred under grazing. The findings of genes that improve resistance to grazing are helpful for the restoration, conservation, and management of desert steppe.