Global change and the intensification of human activities have led to drastic change in grassland ecosystems and the density, coverage and biomass increase of native shrubs or woody have taken place in the grassland around the world. This paper elaborated encroachment from three aspects, including characteristics, distribution, formation mechanism, and effects of encroachment on grassland ecosystem. Many factors, such as grazing,global change etc.,have driven encroachment. Grassland encroachment process not only has changed biodiversity and physiognomy of grassland ecosystem, but also has altered its structure and function. Encroachment plants created microclimate condition, changed interspecies relation, and regulated soil nutrients and material cycle. In the further, remote sensing technology should be combined to estimate the area of encroachment, determine the driving factor of encroachment, and accurately evaluate the structure,function and service of shrub-encroached grasslands.