Desert grasslands that skirt mountain ranges in northern Mexico and the southwestern United States were once common. These grasslands have largely been replaced by shrublands and their soils have become eroded. The most frequently cited causes of these changes are livestock overgrazing, fire and increasing aridity. Studies have not separated grazing and fire from climate effects. Our aim was to determine whether desert grasses are being replaced by shrubs and how rapidly soil surfaces are eroding on unburnt Otero Mesa desert grasslands, where livestock overgrazing has not been a significant factor in historic or recent times. In this article we describe how vegetation and soil surface levels changed from 1982 to 1995 on six permanent transects. Vegetation was measured by charting canopy cover and stem bases of perennial plants in quadrats. Soil surface levels were surveyed in reference to benchmarks placed in nearby bedrock. Vegetation quadrats and surface levels were remeasured in 1995. From 1982–1983 to 1995 the canopy cover of the desert shrubs, Larrea tridentata and Gutierrezia microcephala, declined by 1.5% and 5.8%, respectively. Canopy cover of the C4 xeric grass Bouteloua eriopoda declined by 5.3%. This decline in xeric grass cover was offset by a 1.2% increase in the C4 mesic grass Bouteloua curtipendula and a 4.0% increase in the C3 mesic grass Stipa neomexicana. From 1983–1984 to 1995 soil surfaces along transects eroded an average of 0.4 mm·y⁻¹. Thus, desert shrubs were not replacing desert grasses, but mesic grass species were replacing xeric species. These changes were associated with a 15-y period of relatively wet cool-seasons and moist warm-seasons from 1981 through 1995. These results document that, even in the absence of livestock grazing and fire, desert grassland vegetation is very responsive to precipitation change over relatively short time periods.