1. Global change can greatly affect plant productivity and subsequently litter input to soil, with potential impacts on soil carbon (C) fluxes. However, the effects of litter layer in mediating C cycling and budget at an ecosystem scale is still not clear. 

2. As part of a long-term litter fall manipulation experiment in a temperate steppe on the Mongolian Plateau, this study was conducted to explore effects of litter removal and addition on ecosystem C budget and the associated mechanisms.

3. Overall, litter removal enhanced photosynthetic active radiation (PAR) at soil surface by 31.0%, but litter addition reduced it by 26.5%. Litter removal decreased soil inorganic nitrogen (SIN) content at the depth of 0-10 cm by 13.6%, but litter addition enhanced it by 14.1%. Litter removal increased legume abundance by 131.1%, whereas litter addition enhanced grass abundance by 30.7% but decreased forb abundance by 33.1%. Litter removal increased gross ecosystem productivity (GEP) through enhancing PAR and legume abundance, whereas litter addition elevated GEP by changing plant community composition mediated by decreasing PAR and increasing SIN. Litter removal did not affect ecosystem respiration (ER), but litter addition stimulated ER by 14.9%. Therefore, while litter addition did not affect net ecosystem productivity (NEP), litter removal surprisingly enhanced NEP by 23.9% over the later 7 years.

4. Our findings highlight that more aboveground litter input derived from biomass production may not necessarily result in a larger ecosystem C sink in grasslands under global change scenarios in the future. On the contrary, proper litter removal may be an effective way to increase the ecosystem C sink in grassland management.