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Overgrazing leads to the degradation of grazing lands, which seriously threatens the stability of grassland ecosystems. Root-invading fungi, as one of the main influencing factors, can cause plant diseases in grasslands, reduce the proportion of dominant plant species, increase the proportion of invasive poisonous weeds, and further aggravate degradation. In order to predict and improve the effects of root-invading fungi on grassland degradation, we conducted an in situ soil indoor control experiment using soils collected from non-degraded, moderately degraded, and severely degraded areas of Nanshan pasture in Hunan Province, China. We used monoculture or mixed grasslands of dominant plant species, including Lolium perenne, Trifolium repens, and the invasive weed Persicaria hydropiper, and inoculated them with local strains of pathogenic Fusarium species (Fusarium boothii and Fusarium circinatum) and beneficial fungi Arbuscular Mycorrhizal Fungi (AMF) and Trichoderma hamatum to explore how different strains of fungi affect plant growth and community dynamics. The results showed that Fusarium species (Fusarium boothii and Fusarium circinatum), as a major pathogenic fungus, inhibited the growth of the dominant grass Lolium perenne in moderately and severely degraded soils, which provided growth space and resources for invasive weeds Persicaria hydropiper and further aggravated the degree of grassland degradation. However, the collaborative effect of beneficial fungi (AMF and Trichoderma) and their inhibitory effect on Fusarium species (Fusarium boothii and Fusarium circinatum) could promote the growth of dominant plants and weeds in soils with varying degrees of degradation, which is beneficial to maintaining the stability and diversity of grassland plant communities. The collaborative effect of beneficial fungi could also increase the availability of nutrients in severely degraded soils. Therefore, using beneficial fungi (AMF and Trichoderma) for soil improvement and reducing the harm of pathogenic Fusarium species (Fusarium boothii and Fusarium circinatum) to plant growth is of great significance for promoting the protection and management of grassland ecosystems, as well as for the restoration and recovery of grasslands. [ABSTRACT FROM AUTHOR]