Aim Global change is driving shrub expansion in alpine and Arctic tundra, increasing the size and number of shrub islands. This phenomenon can directly affect the vegetation microclimate and indirectly affect biogeochemical cycling. However, it is unclear how shrub island formation, with a shift in dominant vegetation from graminoids to deciduous or evergreen shrub islands, affects the alpine biochemical cycling of carbon, nitrogen, phosphorus and decomposer diversity and activity. Methods Two dominant shrub species in the alpine shrub meadow in the eastern Tibetan Plateau were selected. Rhododendron lapponicum (RL) represents evergreen shrubs, and Sorbus rufopilosa (SR) represents deciduous shrubs. Soil fauna community diversity, soil microbial biomass, extracellular enzyme activity and enzyme stoichiometry of the organic soil layer (OL) and mineral soil layer (ML) were determined. Results Presence of shrub islands significantly affected nutrient cycling and microbial processes. Compared with the SR shrub island, the RL shrub island featured lower soil total nitrogen and microbial biomass carbon; lower total microbial phospholipid fatty acid, Gram-negative bacteria and total bacteria contents; and higher enzyme activities of β-glucosidase, cellobiohydrolase, β-N-acetylglucosaminidase, peroxidase and polyphenol oxidase. The OL response was greater than the ML response, especially in terms of enzyme activities. Conclusion Evergreen and deciduous shrub islands in an alpine shrub meadow had differences in soil biological communities and nutrient cycling, we suspect the OL was more sensitive than the ML to the shrub expansion in the alpine tundra.