In Yanchi County, Ningxia, the decomposition rates of C. korshinskii litter and the associated soil environment were sampled in microhabitats beneath very small, small, medium, and large shrub canopy sizes. Our study found that (1) during the decomposition process, soil moisture content and soil temperature indicated similar distributions in the four types of shrub canopy size, however, soil pH and soil electrical conductivity changed significantly among the four types. (2) no significant differences within the three mesh sizes between the four types of shrub canopy size in the decomposition rate of shrub litter in the litter bag was found. (3) no significant differences in the litter decomposition rate of shrubs in the litter bag within the three mesh sizes in the medium shrub microhabitat was found. In the very small shrub microhabitat, the decomposition rate of shrub litter within the three mesh sizes were 4 mm (40.95%) > 0.01 mm (38.51%) > 2 mm (32.14%) at 120 d. However, it followed the order of the three mesh sizes of 2 mm (37.64%) > 4 mm (35.20%) > 0.01 mm (26.68%) at 150 d. In the small shrub microhabitat, the decomposition rate of shrub litter within the three mesh sizes followed the order of 0.01 mm (46.81%) > 4 mm (41.07%) > 2 mm (34.75%) at 120 d, whereas it was found to follow the order of the three mesh sizes, being 2 mm (37.64%) > 4 mm (35.20%) > 0.01 mm (26.68%) at 150 d. In the large shrub microhabitat, the decomposition rate of shrub litter within three mesh sizes was 4 mm (39.65%) > 2 mm (36.65%) > 0.01 mm (35.96%) at 120 d. However, it was found to follow the order of the three mesh sizes, being 2 mm (48.05%) > 4 mm (35.96%) > 0.01 mm (30.80%) at 150 d. (4) according to the Olson index, it took 0.95 and 4.1 years for C. korshinskii litter within the three-size meshes to decompose at 50% and 95% respectively in the microhabitats of very small and medium shrub sizes. The litter in the small shrub microhabitats spent 0.63 a and 2.74 a (4 mm), 1.90 a and 8.21 a (2 mm), and 0.95 a and 4.1 a (0.01 mm), of the large shrub size spent 0.95 a and 4.1 a (4 mm), 0.63 a and 2.74 a (2 mm), and 1.90 a and 8.21 a (0.01 mm) with decomposition rates of 50% and 95%. It was concluded that differences in shrub canopy size microhabitats indicated little influence on litter decomposition rates. The results of this study suggest that the interaction between shrub size and soil faunal groups influences the litter decomposition process in the desert grassland ecosystems of Ningxia.