According to the analysis on soil moisture and particle size of the grass land at Jiermeng in Gangcha, the soil moisture content and its impacts on vegetation development were studied. The grain size composition of the middle and upper part of soil in the study area is mainly coarse silt, and at the lower part of soil is mainly fine sand. Soil moisture content in grassland appeared more gravity water in 2009 in this region, and the depth of gravity water in the grass land was up to about 60 cm. Soil moisture is rich in the upper layers and seriously short in the lower. Moderate dried layers with the soil moisture lower than 9% and some serious dried layers with the soil moisture lower than 6% occurred under the soil profiles with the depth of about 80 cm. The development of dried soil layer at this region is due to less precipitation, which held up precipitation infiltrating into the deeper area under ground, so precipitation is generally not the supply source of groundwater. Surface water circulation is mainly through evaporation and transpiration, and belongs to the type of abnormal water cycle. Soil water balance is the negative one in this region, which shows that the local rainfall does not fully meet the needs of growth and development of grass vegetation and is not suitable to forest planting. Soil thickness at Jiermeng Village is thicker than other areas around Qinghai Lake. Because soil water storage is less and soil reservoir can not provide enough water for the growth of herbaceous plants in dry year, the area is prone to environmental degradation. In order to maintain the water level stable and ecological balance of Qinghai Lake, we should develop natural grass vegetation which is suitable to the local climate and consumes less water, and limit the development of artificial vegetation such as the rape consuming more water and simultaneously restrict grazing.