The effects of sand encroachment on composition, diversity, and functional patterns of vegetation in drylands are rarely studied, and yet addressing these aspects is important to deepen our understanding of the biodiversity conservation. This study aimed to investigate the effect of sand encroachment on plant functional biodiversity of desert pavements (gravel deserts) in the Sahara Desert of Algeria. Plants were sampled and analyzed in three desert pavements with different levels of sand encroachment (LSE) and quantity of aeolian deposits (low, LLSE; medium, MLSE; and high, HLSE). Within the sample-plot area (100 m²), density of every plant species was identified and total vegetation cover was determined. Plant taxonomic and functional diversity were analyzed and compared between LSE. Result showed that 19 plant species in desert pavements were classified into 18 genera and 13 families. Asteraceae and Poaceae were the most important families. The species Anabasis articulata (Forssk) Moq. characterized LLSE desert pavements with 11 species, whereas Thymelaea microphylla Coss. & Durieu ex Meisn. and Calobota saharae (C&D) Boatwr. & van Wyk were dominant species of desert pavements with MLSE (14 species) and HLSE (10 species), respectively. The highest values of species richness and biodiversity were recorded in desert pavements with MLSE, while low values of these ecological parameters were obtained in desert pavements with HLSE. Desert pavements with LLSE were characterized with the highest values of species abundances. Plant communities were dominated by chamaephytes, anemochorous, arido-active, and competitive stress-tolerant plants. The increase in LSE along the gradient from LLSE to HLSE induced significant changes in plant community variables including decreases in plant density, plant rarity, lifeform composition, morphological type, and aridity adaptation. Desert pavements with HLSE favor the degradation of vegetation and trigger biodiversity erosion.