The relationship between biodiversity and ecosystem multifunctionality (EMF) is critical to understanding the dynamics of ecosystem services. Several studies have investigated alterations in multiple ecosystem functions under grassland degradation and its relationship with taxonomic diversity. However, how multidimensional biodiversity (taxonomic, functional, and phylogenetic diversity) and abiotic factors mediate EMF in degraded alpine meadows has yet to be well been explored. In this study, alpine meadows with different degrees of degradation were investigated in Maqu County, Gansu Province, China. The average and multi‐threshold methods were used to quantify EMF, while structural equation modeling (SEM) was used for statistical analysis. The results show that: (1) Degradation of alpine meadows has altered the species composition and diversity of plant communities. (2) Taxonomic, functional, and phylogenetic diversity were all significantly and positively correlated with EMF, and species richness, functional richness and Faith's PD effectively drive EMF within thresholds of 22%–75%, 20%–86% and 42%–72%, with maximum effects of 0.29, 0.33 and 0.12, respectively. (3) Degradation of alpine meadows directly and significantly reduced EMF, and mediated indirectly through plant diversity and soil abiotic factors. The multifunctionality index for different degrees of degradation showed non‐degraded (60.89) > light degraded (37.84) > moderate degraded (−14.17) > heavy degraded (−48.55). The results of this study reveal the relative importance of multidimensional plant diversity in predicting EMF of degraded alpine meadows, and potential mechanisms by which plant diversity and abiotic factors mediate the effects of alpine meadow degradation on EMF.