Abstract: Effects of exclosures on species diversity and biomass allocation were studied in a savanna ecosystem in Yuanjiang dryhot valley, Yunnan, Southwest China over two years. The response of understory vegetation to exclosure was compared with the free grazing area. We found that the average height, percentage cover and biomass of understory and its components increased significantly with exclosure compared to free grazing area. Herbaceous species diversity was significantly declined with exclosure. Compared to free grazing, the belowground/aboveground biomass ratio (B∶A ratio) of shrubs under exclosure varied insignificantly, while the branch/leaf biomass ratio for shrubs increased. However, the B∶A ratio of herbs was significantly decreased under exclosure treatments. This could be attributed to adaptation strategies in which plant changes in resource allocation pattern in response to adverse environmental conditions. In general, the exclosure was an effective approach of vegetation restoration and subsequent biomass accumulation. However, appropriate competition and intermediate disturbance (e.g., grazing) can buffer species richness, which is helpful for maintaining the ecosystem stability and functions per se.