Temperate grassland ecosystems are imperiled globally, and habitat loss in North America has resulted in steep declines of endemic songbirds. Commercial livestock grazing is the primary land use in rangelands that support remaining bird populations. Some conservationists suggest using livestock as “ecosystem engineers” to increase habitat heterogeneity in rangelands because birds require a spectrum of sparse to dense vegetation cover. However, grazing effects remain poorly understood because local studies have not incorporated broad-scale environmental constraints on herbaceous growth. We surveyed grassland birds across a region spanning 26 500 km² in northeast Montana, United States to assess how distribution and abundance were affected by weather, soils, and grazing. We modeled bird abundance to characterize regional response to herbaceous cover, experimentally manipulated grazing to isolate its effect, and then scaled back up to evaluate how the regional environment constrains bird response to grazing. Regional models predict that a quarter of our study region was productive grassland where managed grazing could benefit specialist species; the remainder was nongrassland or low-productivity soils where it had low potential to affect habitat. Grassland species distributed themselves along a gradient of herbaceous cover with predictable shifts in community composition. We demonstrated experimentally that grazing influences bird communities within productive grasslands, with higher utilization promoting more Chestnut-collared Longspur (Calcarius ornatus) and fewer Baird's Sparrow (Ammodramus bairdii). Results inform a new conceptual framework for grazing that explicitly incorporates the role of broad-scale environmental constraints.