The agro-pastoral zone of the Loess Plateau, a transitional and ecologically vulnerable area in China, faces several ecological issues, such as grassland degradation due to overgrazing and poor land use. Since 2002, the Chinese government has implemented large-scale ecological restoration projects, including the Grain for Green Program (GPP) and grazing exclusion, which have significantly improved the ecological quality in the area and reshaped the Livelihoods of local farmers. However, how farmers with different attributes perceive or understand the relevance of ecological systems to their well-being remains unclear. In this study, the focus is on the agro-pastoral zone in northern Shaanxi Province by systematically analysing the perceptions of pastoralists and non-pastoralists regarding the nexus between ecosystem services and their well-being. We evaluate whether and how grazing affects their well-being by combining semistructured questionnaire surveys, Fuzzy evaluation, and structural equation modelling. The results show that farmers believe that the quality of the grassland ecosystem has significantly improved since 2000. Pastoralists perceive greater contributions of grassland ecosystem services to their well-being than non-pastoralists, and younger farmers have a stronger sense of well-being than older farmers in both groups. Conversely, older farmers, regardless of grazing, value the regulating and supporting services of ecosystems more than younger farmers do. Education has played a key role in enhancing awareness of the importance of grassland ecosystem services among farmers, highlighting the cognitive competence needed for future conservation policy design. Additionally, improving the social security of older farmers is crucial. In summary, given the ecological improvement and farmers' new need for well-being in the agro-pastoral zone of northern Shaanxi, policymakers need to adjust grazing exclusion and protection policy designs to fully reflect changing ecological, economic, and social conditions.