Grazing exclusion is widely adopted in restoring degraded alpine grasslands on the Qinghai-Tibetan Plateau. However, its effectiveness remains poorly understood. In this study, we investigated the effects of grazing exclusion on plant productivity, species diversity and soil organic carbon (SOC) and soil total nitrogen (STN) storage along a transect spanning from east to west of alpine meadows in northern Tibet, China. After six years of grazing exclusion, plant cover, aboveground biomass (AGB), belowground biomass (BGB), SOC and STN were increased, but species diversity indices declined. The enhancement of AGB and SOC caused by grazing exclusion was correlated positively with mean annual precipitation (MAP). Grazing exclusion led to remarkable biomass increase of sedge species, especially Kobresia pygmaea, whereas decrease of biomass in forbs and no obvious change in grass, leguminous and noxious species. Root biomass was concentrated in the near surface layer (10 cm) after grazing exclusion. The effects of grazing exclusion on SOC storage were confined to shallow soil layer in sites with lower MAP. It is indicated that grazing exclusion is an effective measure to increase forage production and enhance soil carbon sequestration in the studied region. The effect is more efficient in sites with higher precipitation. However, the results revealed a tradeoff between vegetation restoration and ecological biodiversity. Therefore, carbon pools recover more quickly than plant biodiversity in the alpine meadows. We suggest that grazing exclusion should be combined with other measures to reconcile grassland restoration and biodiversity conservation.