Precipitation is a crucial environmental factor that determines the community structure and productivity of temperate grasslands in northern China, located in the arid to semi-arid regions. As a result of the increase in greenhouse gases, precipitation patterns are projected to be changed, and the extreme weather events might become more common. Although many studies have focused on the effects of precipitation change on plant growth characteristics, none has quantified the relationship between precipitation and sensitive indicator (leaf area, plant height, chlorophyll content, etc.). Understanding this relationship is essential to a comprehensive appreciation and accurate prediction of the effects of climate change on plants. Stipa baicalensis, a high quality forage grass, is a dominant species in the meadow steppe in eastern Inner Mongolia, an area that has experienced severe degradation during recent decades and is therefore sensitive to climate change. Clarifying sensitive indicators and their thresholds in S. baicalensis as it responds to precipitation change could provide substantial evidence for both the scientific management of grassland and the drafting measures to address climate change. This experiment was conducted at the Institute of Botany, Chinese Academy of Sciences, from June to August (the main growing season) in 2011. S. baicalensis seeds and soils were gathered from the natural grassland in Inner Mongolia, China, in the autumn of the year before the experiment. Five precipitation levels (-30%, -15%, control, +15%, and +30%), based on the average monthly (June, July and August) natural precipitation of the seed provenances from 1978 to 2007, were used to simulate the effects of precipitation change on 14 eco-physiological indicators, including leaf area, plant height, chlorophyll and leaf N content, etc., in S. baicalensis. There were six replicates (i.e., six pots with four plants per pot) for each precipitation treatment. Each precipitation regime was converted to irrigation amounts for each month, which were then divided and applied every three days after 4:00 P.M. Each pot of plants was destructively harvested and separated into two parts (leaves and roots) at the end of the experiment. Plant height, tiller and leaf number, and leaf area were measured. Leaves and roots were dried and weighed to measure the aboveground biomass, belowground biomass, and leaf N concentration. The changes in precipitation strongly affected the biomass, leaf area, leaf number, plant height, chlorophyll, and leaf N content, etc., but did not influence leaf mass per area (LMA). The results indicated that total leaf area, leaf water potential (or chlorophyll content), and aboveground biomass can represent morphological, physiological, and biomass accumulation characteristics, respectively, and thereby help determine the sensitivity of S. baicalensis to precipitation change. By using the normal statistical tolerance limit, we found the critical points of these sensitive indicators, which were significantly affected by precipitation change, and their corresponding thresholds of precipitation. The threshold of precipitation (total precipitation of June, July, and August) was 283 mm for total leaf area, 276 mm for leaf water potential and chlorophyll content, and 280 mm for aboveground biomass. These results could contribute to objectively identifying the occurrence and development of drought events in S. baicalensis grasslands.