Abstract: Urumqi County is one of the typical pastoral areas in Xinjiang region, and the implementation of the grassland compensation policy is proceeding in an orderly manner. Based on the data from field survey in Urumqi County, this study constructed a binary Logistic model to analyze the influencing factors of herdsmen’s production decision behavior（whether herdsmen changed their management types and whether herdsmen expanded the scale of breeding）, and found out the breakthroughs to guide herdsmen’s production decision behavior. The results showed that the proportion of non-grazing income, grazing prohibition area, timeliness degree of grassland compensation fund and education level of herdsmen had a positive effect on whether herdsmen change their management types. Whether to buy livestock insurance, whether to participate in cooperatives and the balance area between grazing and livestock had significanly negative effects on whether herdsmen change their management types. The area of forage grass planted, the original scale of livestock breeding, the balance area between grazing and livestock and proportion of grassland subsidies had a significanly positive effect on whether the herdsmen expand the scale of breeding. The forbidden grazing area had a significanly negative effect on whether the herdsmen expand the scale of breeding. The author suggested that the implementation plan of subsidy and reward policy for grassland ecological protection should be formulated according to local conditions, and the transformation of herdsmen should be guided and encouraged by the influencing factors of herdsmen’s production decision behavior, so as to improve the grassland ecological environment.