We investigated the independent and combined effects of experimental warming and grazing on plant species diversity on the north-eastern Tibetan Plateau, a region highly vulnerable to ongoing climate and land use changes. Experimental warming caused a 26–36% decrease in species richness, a response that was generally dampened by experimental grazing. Higher species losses occurred at the drier sites where N was less available. Moreover, we observed an indirect effect of climate change on species richness as mediated by plant–plant interactions. Heat stress and warming-induced litter accumulation are potential explanations for the species’ responses to experimental warming. This is the first reported experimental evidence that climate warming could cause dramatic declines in plant species diversity in high elevation ecosystems over short time frames and supports model predictions of species losses with anthropogenic climate change.