Developing sustainable environmental policies in ecologically fragile and deeply impoverished areas is a global challenge. Desertification has caused serious environmental and socioeconomic issues. It is important to reveal the mechanisms of environmental policies when balancing desertification control and poverty alleviation. This study used comparative analysis and trend analysis methods and assessed the policy performances of national key ecological functional areas (NKEFAs) for desertified areas in northern China from 2005 to 2020. Two factors have been fully analyzed: desertification and poverty. The results indicate that adaptive adjustments of the NKEFA policy play an essential role in eradicating the vicious cycle of “degradation-poverty”. Although the improvements in ecological quality were not obvious, its trends changed substantially from decreasing to increasing. The proportions of desert control and socioeconomic improvement were more optimistic in the NKEFAs than in non-NKEFAs (e.g., expansion: 0.41% < 4.67%; improvement: 7.63% > 5.48%). The overall ecological benefit of the adjustment was 0.25%, which experienced a trend of declining first and then rising. The ecological and socioeconomic benefits of the first adjustment were − 0.96% per year and 2.1% per year, respectively. Then, the ecological and socioeconomic benefits of the second policy adjustment were 2.51% per year and 3.2% per year, respectively. The potential mechanism of the NKEFA policy effect is adaptive adjustments that are based on the complexity and variability of the issue. The results contribute to simultaneously tackling ecological degradation and poverty challenges and facilitating sustainable development.