Abstract: The status of alpine grasslands on the Tibetan Plateau not only has a major impact on the welfare of local residents, but also contributes to economic activity in East China, and thus has an important role to play in the overall ecological security of China. To stop grassland degradation, to recover degraded pastures, and to conserve healthy natural grasslands, in 2011 the government implemented an economic payment policy including awards and allowances to local families for their efforts in grassland conservation. We conducted face-to-face interviews with local families in Agriculture counties (AC), Agriculture-Animal-Husbandry counties (AAHC), and Animal-Husbandry counties (AHC) in 2014, with husbandry activities and economic income data collected at the family level, to assess the social and economic influence of this policy. The results showed that economic benefits arising from this policy are unevenly distributed between different family types. Herdsmen families in AHC received much more benefit than those in either AC or AAHC. We found that the policy has altered the income structure of herdsmen families in AHC, and the transferred income accounted for a great proportion of the total income at the family level. In addition, the policy has reduced the family income gap between AHC and AC, but has provided little incentive or increase in income for families in AAHC. It is necessary therefore, to adjust the criteria, methodology and levels of payment to take into account zonal differences in ecosystem functionality, in order for the system to promote the sustainable development of animal husbandry on the Tibetan Plateau.