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The role of institutions providing rules, norms and regulations, in addressing challenges in communal resources management has been debated for several decades. This article analyses the role of informal institutions for addressing shortage of grazing land, conflicts among users of communal grazing land and resistance among users to shift from free grazing to zero grazing in Tigray, Ethiopia. We used in depth interviews and focus group discussions for data collection. We argue that informal institutions are important mechanisms for addressing the challenges in communal grazing land management. The contributions of informal institutions for addressing challenges in communal grazing lands varied with type of challenge and were influenced by distances from markets and Wereda towns. Although the informal institutions were crucial in reversing the shortage of grazing land by regulating access to communal grazing land and enhancing controlled use of grass, they did not contribute to resolving conflicts that arose from unequal allocation of benefits in the village far from a market and Wereda town. Incorporating zero-grazing practices in informal institutions was hindered by disagreements among users and the top-down approach used by development agents when introducing zero grazing. To enhance effectiveness of informal institutions, the increasing grazing pressure should be addressed using more efficient schemes for harvesting grass. Moreover, creating awareness of the need for fewer but more productive cattle breeds is crucial. Consideration of well-performing informal institutions in policy and development interventions is essential to maximise the benefits of communal grazing lands to improve livelihoods of users.