Over half of the alpine meadows in the Qinghai-Tibet Plateau (QTP) are degraded due to human activities. Soil degradation from overgrazing is the most direct cause of grassland degradation. It is thus important to synthesize the effects of multiple soil degradation indicators on the belowground biomass of plants and soil microorganisms in the degraded QTP. We studied the diversities and structures of soil bacterial and fungal communities using soil bacterial 16S rRNA and the fungal ITS gene under four degradation gradients, D1: lightly degraded, D2: moderately degraded, D3: highly degraded, and a non-degraded control site (CK). The bacterial Shannon diversity in D3 was significantly lower than that in D1 (p < 0.001), and the bacterial richness index in D3 was significantly lower than that in D1 (p < 0.001). There was no difference in soil fungal diversity among the different degradation levels; however, soil fungal richness decreased significantly from CK to D3. The phyla Actinobacteria, Acidobacteria and the genus Mortierella were differed significantly under the four degradation gradients. Plant litter mass and root C/N ratio were important factors associated with bacterial and fungal diversity and richness. These results indicated that alpine meadow degradation can lead to variations in both microbial diversity and the potential functioning of micro-organisms in the QTP.