Sandy desertification is one of the most serious environmental problem around the globe, threatening the living and development of nearly 110 countries and 10 million people. It is the product of interaction between ecosystems and social systems. China is one of the most severely countries affected by desertification. Desertification process of agro-pastoral ecotone in northern China has shown a significant reversal trend under the implementation of a series of national ecological protection policies during the past several years. If there is no regulation of ecological policies when we considering the marginal decrease of coercive power of ecological policies and the time limit of ecological compensation project, whether the farmers' livelihood capital reserves and combination form can provide more livelihood options to achieve rehabilitation trend sustainably? It is of great importance to study the relationship of the farmers' livelihood capital and livelihood results under the situation of implementing the grazing prohibition policy, for the purpose of improving the sustainability of farmers' livelihood and desertification reversion. Yanchi County, is taken as the study region in our study is the typical region of desertification reversion in agro-pastoral ecotone. Based on the sustainable livelihood framework and field survey data, the farmers' livelihood capital and the reversion trend of desertification were quantitatively evaluated, respectively. The relationship and influence between the above two factors were studied using grey correlation analysis and binary Logistic model. The results showed that: (1) Farmers' livelihoods capital stock of Yanchi County is only at the stage of maintaining basic needs with a lack of the financial capital and social capital. There are obvious differences between the farmers while only little differences between the villages. (2) The responses of farmers to desertification reversion mainly lie in ecological policy, adaptive behavior, environmental awareness, environmental behavior and environmental perception. There are significant differences on farmers and space in the above five aspects. It is found that 63.76% of respondent households tend to the sustainability of desertification reversion. (3) There is a relatively strong correlation relationship between farmers' livelihood capital and desertification reversion trend under gray correlation test. Human capital and financial capital play a negative role, whereas physical capital, natural capital and social capital have a positive impact on the sustainable development of desertification reversion. (4) Financial capital, social capital and human capital are the key factors impacting the sustainability of desertification reversion trend in Yanchi County.