Salt marshes contribute to climate change mitigation because of their great capacity to store organic matter (OM) in soils. Most of the research regarding OM turnover in salt marshes in times of global change focuses on effects of rising temperature and accelerated sea-level rise, while effects of land-use change have gained little attention. The present work investigates the mechanisms by which livestock grazing can affect OM decomposition in salt marsh soils. In a grazing exclusion experiment at the mouth of the Yangtze estuary, China, we assessed soil microbial exo-enzyme activity (EEA) to gain insight into the microbial carbon (C) and nitrogen (N) demand. Additionally, we studied the decomposition of plant litter in soil using the Tea Bag Index (TBI), a widely used standardized litter bag assay to fingerprint soil decomposition dynamics. Based on EEAs, grazing markedly reduced microbial C acquisition, whereas microbial N acquisition was strongly increased. These opposing grazing effects were also evident in the decomposition of standardized plant litter: The decomposition rate constant (k) and the stabilization (S) of litter were not inversely related, as would be expected, but instead both were reduced by livestock grazing. Our data suggest that gazing effects on EEAs and litter decomposition can just partly be explained by grazing-driven soil compaction and resulting lower oxygen availability, which has previously been hypothesized as a main pathway by which grazing can reduce microbial activity in wetland soils. Instead, grazing effects on microbial nutrient demand occurs to be an at least equally important control on soil decomposition processes.