Abstract The state of the physical environment is reviewed and the importance of grazing in complex rural livelihoods is assessed in the hitherto little studied Tarija altiplano, Bolivia. Past and contemporary climatic fluctuations have dominated environmental change and are reflected in landforms, soils, vegetation, and land use. Broad fluctuations of dry and wet phases, 200–500 years long, occurred between BC 1500 and the 19th century. Warming has taken place during the 20th century, the final decades characterized by sharp climatic fluctuations (drought and floods) typical of the El Niño southern oscillation. Grazing by sheep and cattle—introduced by Europeans 500 years ago—has affected vegetation, but current grazing pressure alone does not explain the differences in biomass. In most of the areas grazed, present-day herds appear not to affect the quality of the vegetation any more than during the past 500 years. The term overgrazing is misleading, given the complexity of vegetation changes. Transhumance, shareherding, rotations, and the use of microenvironments (bofedales and marshland) ensure optimum recovery of pastures. Given access to other pastures at times of climatic stress, as well as seasonal migration, existing resource use appears ecologically sustainable. It is uncertain whether the security offered by pastoralism will meet the rising livelihood expectations of the young.