The conservation and utilization of grasslands are the basis for the sustainable development of grasslands and animal husbandry in China; however, 90% of natural grassland has been degraded to different levels. Prohibiting the utilization of ecosystems is a common approach in ecological conservation, e.g., fencing grasslands. Meanwhile, artificial seeding of forage species has also proved to be effective for ecosystem restoration. There are limited studies on the integrated ecological and economic effects of grassland use change. In this study, the economic and ecological benefits of six grassland management strategies in the river valley area of Tibet were analyzed using three aspects:input, economic output, and ecosystem service values. The results showed that the cost of fencing grassland was the lowest at 67 yuan/hm², which was 0.9% of the cost of annual planting of mown grassland. The economic benefits of conserving grassland were 772 yuan/hm², of which the subsidy was 14.6% and wage income was 85.4%. The economic benefits of perennial planting of grazing grassland and annual planting of mown grassland were 4,250 and 13,135 yuan/hm², respectively. The differences in ecosystem service values among the grassland management options were limited, and the maximum gap was 27%. Considering both economic and ecological benefits, the integrated benefits of natural grazing grassland were higher than those of fencing or plowing grassland, but lower than those of the other strategies. Input (yuan/hm²) increased as natural grazing grassland converted to fenced grassland and annual planting of mown grassland at the village level, and was highest at 50:50 fenced grassland and annual planting of mown grassland. Optimizing the land allocated to fenced grassland and annual planting of mown grassland could simultaneously boost economic development and guarantee a supply of ecosystem services for the local region.