Compared to continuous grazing (CG), rotational grazing (RG) increases herbage production and thereby the resilience of grasslands to intensive grazing. Results on feed intake and animal performance, however, are contradictory. Hence, the objective of the study was to determine the effects of RG and CG on herbage mass, digestibility of ingested organic matter (dOM), organic matter intake (OMI) and live weight gain (LWG) of sheep in the Inner Mongolian steppe, China. During June-September 2005-2008, two 2-ha plots were used for each grazing system. In RG, plots were divided into four 0.5-ha paddocks that were grazed for 10 days each at a moderate stocking rate. Instead, CG sheep grazed the whole plots throughout the entire grazing season. At the beginning of every month, dOM was estimated from faecal crude protein concentration. Faeces excretion was determined using titanium dioxide in six sheep per plot. The animals were weighed every month to determine their LWG. Across the years, herbage mass did not differ between systems (p = 0.820). However, dOM, OMI and LWG were lower in RG than in CG (p ≤ 0.005). Thus, our study showed that RG does not improve herbage growth, feed intake and performance of sheep and suggests that stocking rates rather than management system determine the ecological sustainability of pastoral livestock systems in semi-arid environments.