The Source Region of the Yangtze River is a high-altitude area with extensive permafrost on the Tibetan Plateau. While temperature, precipitation, and radiation significantly affect vegetation phenology, the influence of permafrost changes remains unclear. Using the daily Long-term Seamless NOAA AVHRR NDVI Dataset of China (2003–2022), we extracted the start (SOS) and end (EOS) of the growing season in the Source Region of the Yangtze River (SRYR). Soil thawing date (SOT) was obtained from freeze–thaw state products, while active layer thickness (ALT) was estimated using the Stefan model based on MODIS land surface temperature (LST). Partial least squares regression and mediation analysis quantified the direct and indirect effects of permafrost degradation. Results show: (1) The end of the growing season (EOS) became significantly earlier in 64.33% of the region, while the start of the growing season (SOS) showed little change. (2) The effect of SOT on SOS depends on moisture conditions. Earlier SOT leads to earlier SOS in wetter areas by supplying meltwater, but delays SOS in cold–dry areas by increasing soil water loss. (3) Thicker ALT strongly promotes earlier EOS, accounting for up to 42.61% of EOS variation in cold–dry zones, because a deeper active layer potentially promotes downward movement of water, which may further lead to the potential leaching of nutrients from the shallow root zone, limiting resources for shallow-rooted plants. (4) Alpine meadows respond more strongly to permafrost changes than alpine grasslands. Overall, water loss caused by permafrost degradation may reduce the potential lengthening of the growing season under climate warming, highlighting the key role of soil water in linking permafrost and vegetation dynamics.