Tillering—an important vegetative propagation process in grass whereby new shoots emerge laterally—regulates plant and ecosystem responses to anthropogenic disturbances, especially for desert steppe ecosystems. However, the response of desert steppe plant tillering to grazing and its related physiological mechanisms remain poorly understood. Here, we investigated the impact of long-term (15 yr) grazing intensity, including no grazing (CK), light grazing (LG), moderate grazing (MG), and heavy grazing (HG) on the tiller number, weight, photosynthesis rate, endogenous hormones, and antioxidant enzyme activities, as well as nutrient storage in tiller node and roots of desert steppe species Stipa breviflora. Compared with the CK, grazing reduced the above-ground biomass of S. breviflora in terms of tiller number and weight. Specifically, the tiller number under HG (33 per plant) was significantly lower than under CK (65 per plant). Tiller weight was significantly lower at each grazing intensity compared to CK. While LG improved the leaf net photosynthetic rate, HG decreased the leaf net photosynthetic rate, reduced sugar content, and increased crude protein. Grazing resulted in increased leaf endogenous auxin, gibberellin, and abscisic acid. Other measured factors were not affected by grazing disturbance. Structural equation modeling showed that grazing-induced decrease in tiller number can be co-explained by excess endogenous hormones (auxin, gibberellin, and abscisic acid), and lowered photosynthetic rate and crude protein and sugar content (soluble sugar, and reducing sugar), with standard total effect sizes of 0.51, 0.39 and 0.24, respectively. However, the decrease in tiller weight was only the result of endogenous hormone accumulation, with a standard total effect size of 0.60. Our results demonstrate that grazing negatively impacted tiller number and weight, but highlight different regulatory mechanisms, thus illustrating links between plant physiological characteristics, functional traits, and ecosystem functioning in response to grazing disturbance.