In this paper we summarize recent research in geocryological studies carried out on the Qinghai-Tibet Plateau that show responses of permafrost to climate change and their environmental implications. Long-term temperature measurements indicate that the lower altitudinal limit of permafrost has moved up by 25 m in the north during the last 30 years and between 50 and 80 m in the south over the last 20 years. Furthermore, the thickness of the active layer has increased by 0.15 to 0.50 m and ground temperature at a depth of 6 m has risen by about 0.1° to 0.3°C between 1996 and 2001. Recent studies show that freeze-thaw cycles in the ground intensify the heat exchange between the atmosphere and the ground surface. The greater the moisture content in the soil, the greater is the influence of freeze-thaw cycling on heat exchange. The water and heat exchange between the atmosphere and the ground surface due to soil freezing and thawing has a significant influence on the climate in eastern Asia. A negative correlation exists between soil moisture and heat balance on the plateau and the amount of summer precipitation in most regions of China. A simple frozen soil parameterization scheme was developed to simulate the interaction between permafrost and climate change. This model, combined with the NCAR Community Climate Model 3.6, is suitable for the simulation of permafrost changes on the plateau. In addition, permafrost degradation is one of the main causes responsible for a dropping groundwater table at the source areas of the Yangtze River and Yellow River, which in turn results in lowering lake water levels, drying swamps and shrinking grasslands.