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North-eastern Mongolia is an important breeding area for the globally threatened White-naped Crane Grus vipio. We studied reproductive performance and the influence of factors related to livestock grazing on reproduction and nest-site selection of the White-naped Crane population in the Ulz river valley, north-eastern Mongolia in 2000 and 2001. In 2001, 42 territorial pairs were found in 270 km of river basin. Recruitment was 18–22% resulting in 0.5–0.6 juveniles per territorial pair. The years 2000 and 2001 were within a dry period and recruitment might have been below the long-term average. White-naped Crane nests were significantly associated with river basin sections containing shallow water-bodies. The number and extent of shallow water-bodies are likely to be a limiting factor for breeding population size. Nest-sites in water-bodies were selected for high nest concealment, but nests were initiated even when concealing vegetation was not available. Only 26% of nests were >90% concealed suggesting that appropriate cover was often not available. Nest-sites were also selected for low grazing intensity. No correlation was found between hatching or fledging success and nest concealment or grazing intensity. Brood-size of successful pairs was higher if the home range was ungrazed, but further investigations are needed to clarify whether this was caused by absence of livestock grazing or other factors. Both because of internationally important numbers and because of a potentially high reproductive output, the study area is of high importance for the species.