Rangelands play a critical role in the global carbon cycle. However, the eco-physiological mechanisms associated with the effects of grazing on leaf photosynthesis and soil respiration remain poorly understood. To examine the impacts of grazing on leaf photosynthesis and soil respiration, we measured the photosynthetic parameters of the dominant species (Trifolium repens) and the soil respiration in grazed and ungrazed rangelands in the Tianshan Mountains of China. We found that grazing reduced the daily maximum net photosynthetic rate and soil respiration rates by 35% and 15%, respectively. The photosynthetic quantum yield, dark respiratory rate, and water use efficiency of T. repens leaves were reduced in grazed plots by 33.3%, 69.2%, and 21.5%, respectively. Our results demonstrated that grazing reduced carbon assimilation while increasing soil respiration within the rangelands in the Tianshan Mountains.