Abstract. Physical, chemical and environmental consequences of land use change from cultivated land to desert grassland and vice-versa were monitored in the middle reaches of the Heihe River basin, which is one of the largest inland basins of arid northwest China. Levels of N and P in soils and surface waters and soil organic carbon were measured. After the first 3–5 years of cultivation the N and P contents of various former grassland soils, including mountain-meadow and plains-meadow grasslands, decreased significantly. After some 13 years of cultivation, soil nutrient content in former mountain meadow grasslands gradually stabilized, whereas those of desertified grassland, where cultivation had simply been abandoned, showed a notable decrease. Under these latter conditions, soil N and P were lost at a rate of 276 kg ha−1 and 360 kg ha−1, respectively, over the 13-year period. The transformation of grassland into cultivated land and that of cultivated land into desert grassland resulted in organic carbon emissions of 1.68 Tg C and 0.55 Tg C, respectively, over 13 years. Land use changes in the arid inland region clearly have a significant influence on the soil organic carbon pool and carbon cycle. Falls in soil N and P led to 63% and 34% mean enrichment of N and P, respectively, in downstream waters, thus posing a future environmental problem for the arid region of northwest China.