Ecosystems can shift between alternative states characterized by persistent differences in structure, function, and capacity to provide ecosystem services valued by society. We examined empirical evidence for alternative states in a semiarid grassland ecosystem where topographic complexity and contrasting management regimes have led to spatial variations in levels of livestock grazing. Using an inventory data set, we found that plots (n = 72) cluster into three groups corresponding to generalized alternative states identified in an a priori conceptual model. One cluster (biocrust) is notable for high coverage of a biological soil crust functional group in addition to vascular plants. Another (grass-bare) lacks biological crust but retains perennial grasses at levels similar to the biocrust cluster. A third (annualized-bare) is dominated by invasive annual plants. Occurrence of grass-bare and annualized-bare conditions in areas where livestock have been excluded for over 30 years demonstrates the persistence of these states. Significant differences among all three clusters were found for percent bare ground, percent total live cover, and functional group richness. Using data for vegetation structure and soil erodibility, we also found large among-cluster differences in average levels of dust emissions predicted by a wind-erosion model. Predicted emissions were highest for the annualized-bare cluster and lowest for the biocrust cluster, which was characterized by zero or minimal emissions even under conditions of extreme wind. Results illustrate potential trade-offs among ecosystem services including livestock production, soil retention, carbon storage, and biodiversity conservation. Improved understanding of these trade-offs may assist ecosystem managers when evaluating alternative management strategies.