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Grazing grasslands cover approximately 26% of the Earth's ice-free land surface, making them an important component in maintaining the global carbon balance. Recent research has shown significant carbon losses in soils under intensive pastures, particularly in developing countries where livestock farming is a dominant land use. This study aims to evaluate the net ecosystem carbon balance (NECB) of cultivated grassland grazing sheep pasture in the arid inland region of Northwest China. Based on life cycle analysis of carbon balance in grassland production systems, we hypothesis that grazing systems have a higher carbon sink capacity than hay harvesting systems because of the coupling between grassland and livestock. The sown pasture of wheat and alfalfa-fescue mixture rotationally grazed by sheep was the carbon sink, whilst the harvested pasture was the carbon source (four years). The carbon emissions per food equivalent unit (a food production units calculated based on protein and energy content) in the grazing pasture was 78.84% lower than that of the hay pasture. In grazing annual pasture and perennial pastures, the carbon emissions from livestock, processing and allocation of forage products accounted for 3.95%, 96.05% and 2.01%, 97.99% of the whole carbon emissions, respectively. The carbon emissions from sown pasture, where hay is harvested, mainly came from fertilization, irrigation and the processing and transportation of forage products. Therefore, strategies of carbon mitigation should focus on the greenhouse gas emissions of livestock production in grazing systems, and the processing and circulation of fertilization, irrigation inputs, and forage products in hay-harvesting pasture.