Abstract: This paper investigates factors affecting botanical composition of the herbaceous understory layer in a dry valley ecotone in mountain forest in the upper reaches of the Minjiang River in Sichuan province of southwest China. Eight study plots were identified between 2588 m and 2692 m altitude and the vegetation cover (shrub or plantation forest), aspect, slope, and slope position (top, middle or bottom) characterized. Quadrat sampling (1 m×1 m) was used to determine importance of 68 botanical species recorded in the 8 plots and positive or negative correlations in occurrence among 9 dominant species determined by Jaccard index and χ² test. A grassland quality index based on herbage mass and estimated palatability and certain other grassland pattern indexes were determined. Proximity of quadrats to animal grazing paths was also recorded and data were subjected to canonical correspondence analysis (CCA) to determine relationships among the various site factors and presence of particular species. Members of the Asteraceae were important among the dominant species and members of the Fabaceae and Poaceae less so, which indicated that the herbaceous understory layer vegetation is degraded by long-term grazing. The correlation analyses identified Artemisia lavandulifolia and Deyeuxia scabrescens as dominant understory species in plantation forest plots. Seven other species including Artemisia annua and Oxytropis kansuensis were dominant in shrub land. In CCA the first 3 axes accounted for 75.4% of the data variation with axis 1 strongly separating grazing path and shrub land species from forest species, axis 2 separating shrub land species of differing slope and slope position, and axis 3 further characterizing species associated with animal grazing paths. Factors affecting the grassland quality and pattern indices were complex and not clearly resolved in this study but it is likely that grazing-related degradation was an important influence on these indices.