The N deposition rate is notably increased in China, especially in the Qinghai-Tibetan Plateau (QTP). How plants respond to the projected N deposition on the alpine steppe is still in debate. In this study, to investigate the effects of N deposition on the plant community of the alpine steppe, we simulated N deposition at six different N addition rate levels (0, 8, 24, 40, 56, 72 kg N ha−1 y−1) from 2015 to 2019. Species composition and diversity were investigated as the assessment indices. The results showed that the importance value of grasses significantly increased with the increase of the N addition rate, while that of forbs significantly decreased. A high N addition rate (72 kg N ha−1 y−1) induced species composition change, making Leymus secalinus become the most dominant species within the entire plant community. Compared with the control (without N addition), species richness, Shannon–Weiner diversity, Simpson dominance and Pielou Evenness were significantly reduced under a high N addition rate. The changes of plant diversity in the alpine steppe were closely correlated with dynamics of soil nutrients, especially total carbon (TC), total phosphorus (TP) and ammonia nitrogen (NH4-N). Our findings suggested that a high N deposition rate (72 kg N ha−1 y−1) could significantly change plant composition and reduce the diversity of the alpine steppe, though they were less affected by low N deposition rates at present. With the increase of the N deposition rate, plant composition and diversity of the alpine steppe may be negatively affected in the future. In addition, Leymus secalinus is more competitive than other species with an N deposition rate increase. Soil C, soil P and soil NH4-N variation induced by N deposition might play a key role in regulating changes in plant composition and diversity in the alpine steppe. In addition, longer term field investigation needs to be carried out to testify to this phenomenon with the increase of N deposition in the future.