Understanding vegetation responses to atmospheric drought is critical for arid ecosystem management under climate change. However, the threshold of the response mechanism of grassland in arid regions to atmospheric drought remains unclear. This study investigates how vapor pressure deficit (VPD) regulates grassland gross primary productivity (GPP) in Xinjiang, China, using MODIS and other multi-source remote sensing data (2000-2020). The results show intensified atmospheric drought in central Tianshan Mountains and southern Junggar Basin, with VPD exhibiting a widespread increasing trend (significant increase: 15.75%, extremely significant increase: 4.68%). Intensified atmospheric drought occurred in the central Tianshan Mountains and southern Junggar Basin. Integrated analyses demonstrate that VPD has a dominant negative impact on GPP (path coefficient = -0.58, p < 0.05), primarily driven by atmospheric drought stress. A ridge regression-derived threshold was identified at 0.61 kPa, marking the point where VPD transitions from stimulating to suppressing productivity. Spatially, 58.75% of the total area showed a significant increase in GPP. These findings advance the mechanistic understanding of atmospheric drought impacts on arid ecosystems and inform adaptive grassland management strategies.