Grassland soils are globally important sinks for atmospheric CO2, and their carbon (C) is primarily formed from plant inputs of above- and belowground. Aridity is expected to increase in grassland biomes with climate change, which may influence soil C dynamics through its effects on plant productivity and biomass allocation (i.e., the root/shoot ratio). However, it remains unclear on how aridity controls root versus shoot contributions to soil organic carbon (SOC) pools in grasslands. Here we investigated plant biomass allocation, plant and soil C isotopic signature, soil microbial biomass, SOC stock and its respective heavy versus light factions along a 1500 km aridity gradient (0.47 ≤ aridity ≤ 0.79) across steppe grasslands in northern China. We identified a central role of aridity in the cascading chain of SOC formation and stability. Both plant biomass and SOC decreased with aridity, but root/shoot ratio increased with aridity. Isotopic and regression analyses revealed that SOC were primarily contributed by shoots in wet grasslands (aridity < 0.61), but more by roots in drier areas (aridity ≥ 0.61). These are consistent with patterns of microbial biomass and its fraction to SOC, both of which decreased with aridity, indicating SOC are more contributed by microbial biomass in wet sites. Similarly, microbial C was also derived mainly from shoots in wet grasslands but from roots in drier areas. Such changes in plant biomass allocation and dominant sources of SOC along increasing aridity explain an elevating fraction of heavy C in SOC, suggesting SOC in drier sites are stabler. Our study thus highlights that aridity strongly controls the pool size and stability of SOC by influencing the relative contributions of roots and shoots to SOC in steppe grasslands. As climate change continues to unfolds, our findings have important implications for predicting steppe SOC stocks and their stability in the future.