To clarify the regulating effect of vegetation and soil factors on microbial communities in the alpine steppe under degradation on the Qinghai-Xizang Plateau, the alpine steppe in the Sanjiangyuan area of the Qinghai-Tibet Plateau was chosen. We analyzed the differences in vegetation and soil factors in different stages of degradation (non-degradation, moderate degradation, and severe degradation) and detected the variations in microbial community characteristics in the alpine steppe under different degradation stages using high-throughput sequencing technology. Eventually, redundancy analysis (RDA) and multiple regression matrixes (MRM) based on the similarity or dissimilarity matrix were used to identify key environmental factors regulating microbial (bacterial and fungal) community changes under degradation. The results showed that the degradation of the alpine steppe significantly changed the community coverage, height, biomass, and important value of graminae; significantly reduced the contents of soil organic matter, total nitrogen, total phosphorus, and silt; and increased the soil bulk density and sand content. Degradation did not change the composition of bacteria and fungi, but their composition proportions changed and also resulted in the loss of microbial richness (Chao1 index and Richness index) but did not significantly change the microbial diversity (Shannon index). With the occurrence of degradation, the vegetation characteristics, soil physicochemical properties, and microbial diversity showed a consistent change trend. Combined with the characteristics of the network topology changes (the number of nodes and clustering coefficient significantly decreased), it was found that degradation of the alpine steppe led to the decline of interspecies interactions, decentralization of network, and homogenization of microorganisms, but the cooperation relations among the species were maintained (positive correlation connections accounted for more than 90% in all degradation stages). Under the alpine steppe degradation, the vegetation-soil interaction had the greatest effect on soil bacterial community, whereas soil physicochemical properties had the greatest influence on soil fungal community. Specifically, vegetation community height, biomass, and soil bulk density were the mutual factors regulating soil microorganisms, whereas the vegetation Simpson index, important value of graminae, soil total phosphorus, total potassium, and silt content were the unique factors affecting the soil bacterial community, and soil pH and total nitrogen content were the particular factors affecting the soil fungal community.