Aboveground and belowground invertebrates play a key role in decomposition of organic matter in terrestrial ecosystems. Dung beetles are well known for their functions in breaking down and transporting ungulate dung into soils thus promoting dung decomposition. However, the effects of functionally different dung beetles on the decomposition processes of the dung from different ungulates remain less explored. We did an in situ experiment using the 'dung and soil' mesocosm to investigate the separate and combined effects of two functionally contrasting dung beetle species, a dweller Aphodius sordecens and a tunneler Onthophagus gibbulus, on the decomposition processes of the dung from horse and cattle. We determined the changes in dung mass, dung C and N contents, microbial respiration from the 'dung and soil' mesocosm or from the soil beneath the dung pats, and examined the amount of dung balls transferred by beetles into different soil layers, under five dung beetle treatments (C – soil, no dung nor beetles; D – dung on soil with no beetles; DB - dung on soil with dweller beetles; TB - dung on soil with tunneler beetles; DTB - dung on soil with dweller and tunneler beetles) were applied to the dung of two major grazers with different digestive systems in native steppes in northern China, over a two-month period following dung deposition. We found that (1) tunneler beetles (in TB and DTB) significantly enhanced the dry mass loss of cattle dung but not horse dung. (2) Dung C and N contents declined more rapidly with the presence of any dung beetle species (DB-DTB) than that without (D); and dung N content showed different decreasing rates between horse and cattle dung in different decomposition periods. (3) The presence of the two functionally contrasting dung beetle species together had a synergistic, positive effect on soil microbial respiration and thus on the decomposition rate of soil organic matter; however, no significant effects of beetles on net microbial respiration was detected in the 'dung + soil' mesocosm. (4) The direct effect of dung beetles on dung mass loss was stronger for cattle dung than for horse dung. In contrast, the decline in moisture content of horse dung with decomposition time affected the microbial respiration in dung, and thus indirectly affected the dry mass loss and the C and N contents. Our results suggest it critically important to incorporate the functions of soil invertebrates into nutrient cycling models to improve their accuracy, and to promote invertebrate diversity in grazed grassland to maintain ecosystem health and services.