Understanding the interactive effects of multiple keystone species where they co-occur may have important consequences for regional biodiversity. Additionally, understanding how the impacts of keystone species vary across different ecosystems is important for effectively guiding conservation and management. We conducted a large-scale field study in northern Mexico where the geographic distributions of black-tailed prairie dogs Cynomys ludovicianus and banner-tailed kangaroo rats Dipodomys spectabilis overlap. These species are considered both keystones and ecosystem engineers of grassland environments, but little is known about their separate and interacting roles in desertified systems where they co-occur. Our research evaluated 1) the independent impacts of black-tailed prairie dogs and banner-tailed kangaroo rats in a desertified annual grassland, and 2) their interactive effects on grassland community structure and biodiversity. Prairie dogs and kangaroo rats differentially affected vegetation structure, plant cover, species composition, and species richness across multiple spatial and temporal scales. The interactive effects of these keystone species resulted in enhanced landscape heterogeneity and biodiversity. Our results demonstrate the importance of prairie dogs and kangaroo rats in desertified grasslands, and have important implications for understanding the interactive effects and context-dependency of keystone species.