Grassland degradation in China is widely perceived to be accelerating, and the blame is often placed by government officials and researchers on a supposed “tragedy of the commons.” Grassland policy seeks to address this through the establishment of household tenure and the derivation and external enforcement of household stocking rates. Drawing upon the authors' field research at a number of sites in western China, this article argues that the actual tenure situation is not as open access as is commonly implied and that existing forms of community-based management (including collective and small group tenure) are advantageous, given the socioeconomic and ecological context. Among other things, community-based management can facilitate low-cost external exclusion, economies of size in herd supervision, equal access to pastoral resources, the mitigation of environmental risk, and the prompt resolution of grassland-related disputes. Recent innovative attempts to both improve and formalize collective and group tenure arrangements indicate that there is a wide range of different possible grassland tenure-management models available, in addition to the household tenure–household management model emphasized in grassland policy. China's revised Grassland Law (2003) arguably provides legal space for these alternative models. However, for the future of community-based grassland management to be secure, implementing agencies need to be more aware of these alternative models and have the willingness and capacity to adopt a flexible and participatory approach to grassland policy implementation.