Clarifying the mechanisms linking grazing, the supply of ecosystem services (ESs), and human wellbeing (HWB) provides a theoretical basis for sustainable grassland use. Current research often depends on unverified secondary data or subjective perceptions for assessments, which may undermine the accuracy of the results and limit our understanding of interactions within pastoral socioecological systems. In this study, we used field survey data to explore the mechanisms linking grazing, ES supply and HWB. We conducted field sampling and household interviews across 101 typical pastures in Xinjiang. We evaluated the tradeoffs among aboveground biomass, species richness, soil nutrients, water conservation and carbon storage using root-mean-square deviation. Structural equation modelling was applied to identify the mechanisms of interactions among grazing, ES supply and HWB while accounting for aridity as a climatic control. The results revealed that in terms of the tradeoffs between aboveground biomass and the other ESs, the data points were skewed towards the other ESs. Although disparities in per capita income persisted, differences in health, energy and gender equality were relatively small. However, progress evenness remained a comparatively underdeveloped aspect in achieving HWB. Under current grassland utilisation, grazing had a significant positive effect on HWB and a negative effect on ESs. However, the impact of drought on ESs was stronger than that of grazing. This study revealed that grazing enhanced HWB but damaged ESs, creating a tradeoff in Xinjiang. We recommend strengthening protection and management measures to support sustainable grassland use.