This act established federal management policy on public grazing lands, the last major category of public lands to be actively managed by the government. The delay in its passage was due to a lack of interest (the lands were sometimes referred to as "the lands no one wanted") and due to competition between the Agriculture Department and the Interior Department over which department would administer the new program.

The purpose of the Taylor Grazing Act was to "stop injury to the public grazing lands...to provide for their orderly use, improvement and development...[and] to stabilize the livestock industry dependent on the public range." To achieve these purposes, the Secretary of the Interior was authorized to establish grazing districts on the public domain lands. The lands within these established districts were to be classified for their potential use, with agricultural lands to remain open...