In the past two decades, increasing human activity (i.e., overgrazing) in the Tibetan Plateau has strongly influenced plant succession processes, resulting in the degradation of alpine grasslands. Therefore, it is necessary to diagnose the degree of degradation to enable implementation of appropriate management for sustainable exploitation and protection of alpine grasslands. Here, we investigated environmental factors and plant functional group (PFG) quantity factors during the alpine grassland succession processes. Principal component analysis (PCA) was used to identify the parameters indicative of degradation. We divided the entire degradation process into six stages. PFG types shifted from rhizome bunchgrasses to rhizome plexus and dense-plexus grasses during the degradation process. Leguminosae and Gramineae plants were replaced by sedges during the advanced stages of degradation. The PFGs were classified into two reaction groups: the grazing-sensitive group, containing Kobresia humilis Mey, and Gramineae and Leguminosae plants, and the grazing-insensitive group, containing Kobresia pygmaea Clarke. The first group was correlated with live root biomass in the surface soil (0–10 cm), whereas the second group was strongly correlated with mattic epipedon thickness and K. pygmaea characteristics. The degree of degradation of alpine meadows may be delineated by development of mattic epipedon and PFG composition. Thus, meadows could be easily graded and their use adjusted based on our scaling system, which would help prevent irreversible degradation of important grasslands. Because relatively few environmental factors are investigated, this approach can save time and labor to formulate a conservation management plan for degraded alpine meadows.