In Switzerland, steppe vegetation is restricted to inner alpine dry valleys in the West (Valais) and the East (Grisons). They harbour many specialist and threatened species. In 2011, a long-term program was established to monitor changes in Swiss habitats of national importance. Here, we studied patterns of vascular plant diversity in a subset of 148 steppe plots of 10 m² from this program. Plots were either grazed or abandoned. On average, we found 23.3 species per plot. The proportion of steppe specialists and of threatened species out of the total species richness was 29.3% and 12.2%, respectively. The total number of species increased with elevation and peaked at intermediate productivity levels. In contrast, the proportion of threatened and steppe specialist species was generally negatively related to higher productivity and wood cover – two factors considered as indicators of habitat degradation. Abandonment vs. pasture had no effects on total species richness. Productivity was positively related to ecological indicator values for moisture, competition and ruderality, as well as the community mean traits of plant height and specific leaf area, but negatively with the indicator value for light. Similarly, wood cover was positively associated with higher ecological indicator values for productivity, moisture and competition, as well as the community mean trait of plant height, but negatively with the indicator value for light and ruderality. The negative response of threatened and steppe specialist vascular plant species to habitat degrading factors suggests their proportional richness to be a better indicator of habitat quality than the total species richness. We conclude that management regimes which guarantee low productivity and low wood cover and avoid intensification by fertilization and irrigation are essential for the conservation of steppe habitats. Beside periodic clearing of woody species, low-intensity grazing might prevent shrub encroachment.