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Vegetation restoration is one of the most common and effective ways to combat desertification and prevent adjacent areas from sand encroachment in many of the desertified regions of the world. However, vegetation restoration in desertified regions is very difficult because of low rainfall, the mobile ground surface, and cost. An effective, low-cost method of afforestation is urgently required. To determine such a method, a 10-year study was carried out in the Jilantai Salt Lake area. Five different afforestation areas were established: a ‘comparison area,’ a ‘land enclosure area,’ a ‘land enclosure + irrigation area,’ a ‘leveled-afforestation area’ (the dune areas were leveled and then planted with seedlings with added irrigation), and a ‘protected afforestation area’ (the dune areas were planted with seedlings, and the surviving natural vegetation was protected as much as possible). Vegetation-related parameters (survival rate, height, trunk diameter, coverage, canopy size, and density) and environment-related factors (relative humidity, wind velocity, and amount of sand encroachment) were measured by standard methods. Results show that the protected afforestation method had the following advantages: (1) the survival rate was higher for seedlings planted in the protected afforestation area than in the leveled afforestation area; (2) vigor (height, trunk diameter, coverage, and canopy size) was better in seedlings planted in the protected afforestation area than in the leveled afforestation area, especially in the beginning period of revegetation; (3) coverage (of individual species, of all planted vegetation, and of all vegetation) was larger in the protected afforestation area than in the leveled afforestation area; (4) density of naturally germinated plant species was higher in the protected afforestation area than in the other areas, showing that the protected afforestation method provided a suitable growing environment not only for planted species but also for naturally growing species; (5) in the protected vegetation area, relative humidity of air increased and wind velocity was greatly reduced; (6) after the establishment of vegetation by the protected afforestation method, sand encroachment into the salt lake area was significantly reduced. These results suggest that protected afforestation is an effective method of vegetation rehabilitation that has the potential not only to be applied to arid lands in China but also to desertified areas throughout the world; (7) cost-effective calculation shows that the leveled afforestation area costs much more than other areas.