Plant functional groups (PFGs) have been increasingly introduced in land degradation (LD) studies; however, it is unclear whether PFGs can indicate LD. Here, we selected five different degraded lands (i.e., pristine and, lightly, moderately, seriously and extremely degraded) higher than 4650 m on the Tibetan Plateau. In addition, we investigated floristic metrics (i.e., composition, height, cover, biomass and abundance) and soil conditions (e.g., moisture, temperature and gravel ratio) by sampling 225 subplots. We found 75 vascular plants that consist of sedges (Cyperaceae), grasses (Gramineae), legumes, forbs, cushion plants and shrubs PFGs. LD dramatically deteriorated soil conditions, vegetation cover and productivity, however, improved species diversity. Moreover, cover and productivity showed a hump-shaped relationship with LD intensification in legumes, grasses and forbs and decreased mainly in sedges. Productivity increased considerably in cushion plants and shrubs on the extremely degraded land. Major characteristics of the LD process were the replacement of Kobresia spp. by Carex spp. in sedges; cushion plants significantly expanded, and shrubs appeared on the extremely degraded land. We, thus, confirm that the PFG variations are likely to indicate a LD process and demonstrate ways of using PFGs to assess LD status on the Tibetan Plateau.