Wetlands, as complex ecosystems between terrestrial and aquatic environments, have been frequently impacted by human activities, particularly livestock grazing. This has led to changes in biodiversity and ecosystem functions. It remains unclear how crucial grazing-induced shifts in plant community traits and the properties of soil are in promoting ecosystem multifunctionality (EMF) in wetland ecosystems. As a result, we investigated the effects of livestock grazing at three different intensities (no grazing, moderate grazing, and heavy grazing) on plant functional traits, functional diversity, ecosystem functions, and ecosystem multifunctionality (EMF) in herbaceous marsh wetlands in the Tumen River Basin of Northeast China. Our findings indicated that as grazing intensity increased, plant growth strategies shifted significantly from acquisitive traits to conservative traits. The rise in functional evenness (FEve) and drop in functional divergence (FDiv) indicated a strong grazing-induced filtering effect, making coexisting species more functionally similar. Additionally, several ecosystem functions (aboveground biomass, belowground biomass, soil organic carbon, total nitrogen, total phosphorus, etc.) and EMF declined dramatically as grazing intensity increased. The results of the structural equation model revealed no significant relationship between plant community traits and EMF. By contrast, changes in soil environmental factors were found to make an important contribution to the reduction in EMF. Our results highlight the crucial role of soil environmental factors in regulating EMF responses to grazing, offering insights for the sustainable development of herbaceous marsh wetlands.