Under the background of global climate change, shrub encroachment, as a widespread ecological phenomenon in arid and semi-arid regions, profoundly influences ecosystem structural stability, biodiversity maintenance, and material cycling. As a dominant species in the Ningxia desert steppe, the community dynamics of Artemisia scoparia play a crucial role in maintaining regional ecosystem stability. To investigate the effects of shrub encroachment by Ammopiptanthus mongolicus on the community characteristics and soil properties of Artemisia scoparia, this study conducted community vegetation surveys in the desert steppe of Ningxia, a typical arid region in northwestern China. This study established plots with heavy, moderate, and light shrub encroachment, as well as control plots without shrub encroachment. Soil physicochemical properties and enzyme activities were systematically determined in the 0–10 cm, 10–20 cm, and 20–40 cm soil layers. The results showed that compared with non-encroached plots, the herb density, vegetation height, and coverage of Artemisia scoparia communities decreased with increasing shrub encroachment intensity, while the aboveground biomass in plots with moderate shrub encroachment was significantly higher than in other shrub encroachment plots. The species richness, Shannon-Wiener diversity index, Simpson dominance index, and Pielou evenness index presented a decrease–increase–decrease trend with increasing shrub encroachment intensity, with the indices in moderate shrub plots being significantly higher than those in other shrub encroachment plots. Soil moisture content in different soil layers was significantly higher in plots without shrub encroachment than in plots with severe shrub encroachment, while soil bulk density showed the opposite trend, and there was no significant difference in soil pH among different shrub encroachment plots. Shrub encroachment promoted the accumulation of soil organic carbon, total nitrogen, and total phosphorus in different soil layers. Soil C:N, C:P, and N:P ratios showed significant differences among different shrub encroachment degrees. Soil urease, sucrase, and alkaline phosphatase activities in plots with heavy shrub encroachment were significantly higher than those in other shrub encroachment plots. Redundancy analysis showed that the cumulative explanatory power of environmental factors for the first two ordination axes was 65.57%, among which soil C:P, N:P, and sucrase were the key factors influencing the community characteristics of Artemisia scoparia. In conclusion, this study revealed the effects of different degrees of shrub encroachment on the community characteristics and soil properties of Artemisia scoparia in desert steppe, elucidated the responses of plant-soil feedbacks to shrub encroachment, and provides theoretical guidance for the restoration and sustainable management of shrub-encroached grasslands in northwestern China.