Land degradation is a severe environmental problem on a regional and global scale that is often aggravated by intensive land‐use and climate change. The arid to semi‐arid Xilingol in Inner Mongolia, China, is an example of an area that has witnessed continuous land degradation for decades, in spite of numerous attempts to reverse this trend. In this study, land‐use and land‐cover change (LUCC) between 1975 and 2015 was investigated for Xilingol based on multi‐temporal remote sensing images. The aim of the study was to derive detailed information on LUCC over space and time as a basis for assessing ecological and social consequences of land degradation in a bid to develop better strategies for combating land degradation. Two main LUCC processes and two distinct phases were identified: During Phase 1 (1975–2000), the LUCC pattern was dominated by land degradation, affecting 11.4% (22,937 km2) of the total area. During Phase 2 (2000–2015), land restoration increased (12.0% or 24,161 km2) whereas degradation continued, resulting in a further 9.5% (19,124 km2) of degraded land. The transition pattern changed accordingly. Our findings show that, in spite of notable restoration successes in the past, grassland degradation continues to be the main ecological and environmental problem in Xilingol, requiring the continued attention of decision‐makers. Strategic land‐use management has already had a significant influence on LUCC in this area, leading to the expectation that science‐based land‐use strategies can be developed to further reduce land degradation in Xilingol.