Climate change would have profound influences on community structure and composition, and subsequently has impacts on ecosystem functioning and feedback to climate change. A field experiment with increased temperature and precipitation was conducted to examine effects of experimental warming, increased precipitation and their interactions on community structure and composition in a temperate steppe in northern China since April 2005. Increased precipitation significantly stimulated species richness and coverage of plant community. In contrast, experimental warming markedly reduced species richness of grasses and community coverage. Species richness was positively dependent upon soil moisture (SM) across all treatments and years. Redundancy analysis (RDA) illustrated that SM dominated the response of community composition to climate change at the individual level, suggesting indirect effects of climate change on plant community composition via altering water availability. In addition, species interaction also mediated the responses of functional group coverage to increased precipitation and temperature. Our observations revealed that both abiotic (soil water availability) and biotic (interspecific interactions) factors play important roles in regulating plant community structure and composition in response to climate change in the semiarid steppe. Therefore these factors should be incorporated in model predicting terrestrial vegetation dynamics under climate change.