Nitrogen and water as a co-limitation of primary productivity in steppe has attracted much attention in the rapid restoration of the degraded grassland. In this study, we take desert steppe of Stipa breviflora under different grazing intensities as study object, and simulation grazing, nitrogen addition, and water addition were carried out at the fenced site. By analyzing the effects of historical grazing intensity, year, nitrogen addition, and water addition on total aboveground biomass and plant biomass of different functional groups, we discovered the regulation mechanism of sustainable utilization of Stipa breviflora in a desert steppe under different grazing intensities. The results showed that rainfall and grazing intensity determined the structure of plant community in the desert steppe of Stipa breviflora. Nitrogen addition and water addition enhanced total aboveground biomass by 11%-29% and 12%-32%, respectively, with significantly interaction. The response of plant growth to nitrogen and water addition was different in different functional groups, and perennial bunch grasses were most sensitive to nitrogen and water addition. Nitrogen addition and water addition significantly increased aboveground biomass affecting the perennial bunch grasses, but associated with rainfall. The effect of nitrogen addition on aboveground biomass was significant in normal rainfall and lightly dry years, while water addition was significant in dry years. In normal rainfall years, water addition to increase productivity is most appropriate in the light grazing grassland which is with semi-shrubs as dominant species, while combined nitrogen and water addition to enhance productivity is most appropriate in the moderate grazing grassland which is with semi-shrubs and perennial bunch grasses as co-dominant species, and in the heavy grazing grassland which is with perennial bunch grasses as dominant species. In dry years, combined nitrogen and water addition to increase productivity is most appropriate in grassland under different grazing intensities. Our results show that the improvement of nutrients and resources is beneficial to the rapid recovery and sustainable production of the degraded Stipa breviflora steppe.