Dung beetles, as keystone decomposers in grassland ecosystems, sustain grassland health by accelerating dung decomposition, enhancing soil nutrient cycling, and promoting vegetation growth. However, intensive grazing, overuse of chemical pesticides, and habitat degradation have led to significant declines in their population abundance and diversity. This review systematically synthesized the ecological functions of dung beetles and their global population decline, revealing that functional diversity contributes more substantially to dung removal efficiency than species diversity. Residues of pharmaceuticals such as ivermectin reduced fecundity and diminished dung decomposition rates, triggering cascading ecological consequences, including exacerbated surface dung accumulation and increased greenhouse gas emissions. Global case studies demonstrate that conservation-oriented introduction programs can restore dung beetle functionality, generating annual economic benefits amounting to hundreds of millions of dollars. Although China has included certain dung beetle species in conservation lists, comprehensive protection strategies remain underdeveloped. Future efforts must prioritize interdisciplinary research on grassland-dung-beetle interaction mechanisms, develop monitoring technologies for pesticide resistance, and establish safety protocols for veterinary drug application alongside adaptive seasonal grazing bans. Concurrently, fostering public engagement and cross-regional collaboration will be critical to achieving grassland ecological restoration and the sustainable development of livestock husbandry.