Montane small mammals are subjected to strong forces of dispersal limitation and habitat filtering that mainly operate on their community structures along the altitudinal direction. However, so far little is known about the relative contributions of dispersal and niche processes to their community assembly. By applying the newly proposed PER-SIMPER/DNCI (dispersal-niche continuum index) framework to small mammal occurrence data collected from 21 extensive altitudinal gradients, we quantitatively assessed the relative importance of dispersal and niche processes on mammalian community assembly in a large mountainous region of southwestern China. We compared the pairwise DNCI values among assemblages from low, middle and high altitudinal zones and overall DNCI values between glires and insectivores that differ in dispersal abilities to test three explicit (altitudinal connectivity, environmental difference and dispersal ability) hypotheses. The overall DNCI values for all small mammal species combined (−12.7 ± 0.4, 90 species), glires (−12.8 ± 0.5, 56 species) and insectivores (−13.5 ± 1.4, 34 species) values were all negative, while insectivores showed a lower value than glires. For both all species combined and glires, we found a lower pairwise DNCI value between the low and high altitudinal zones than that between the other two pairs of altitudinal zones. Our study indicated that an altitudinal dispersal process dominates the taxonomic composition of small mammal assemblages in this region. Importantly, the results reinforced the idea that community structures of less vagile taxa are more subject to dispersal limitation; and yet another idea that assemblages from further altitudinal areas are more differentiated by dispersal process was only supported in glires and all species combined. Community biologists should, therefore, pay attention to recent climate-induced upward range shifts by montane species, which may dramatically alter their community structures in different altitudinal zones through dynamics of immigration and mountaintop extinction.