Biomass production and litter decomposition of wetland plants are two important phases for carbon cycle of wetland ecosystems and its trade-off is essential for the carbon sink function and carbon sequestration research on wetland ecosystems. Napahai wetland, one of the 12 Ramsar plateau wetlands, is located in the northwest Yunnan plateau. It is a typical wetland with enclosed and semi-enclosed character and its high biodiversity and uniqueness has received considerable concern worldwide. However, there is few studies on its ecological function of regional carbon cycle and greenhouse gas trade-off under a chilly and humid plateau climate. In this paper, three dominant lakeshore plants, Zizania caducifolia, Scirpus tabernaemontani and Heleocharis liouana were selected as target species. For each species their community characteristics and aboveground biomass were measured by field survey and harvesting, and their litter decomposition rate was determined by mesh bag method. The aims of this study were 1) to quantify biomass retention among these species and 2) to gain insights into the carbon cycle process of wetland ecosystems and their roles of different lakeshore plants. The results showed that Zizania caducifolia, Scirpus tabernaemontani, and Heleocharis liouana all formed typical lakeshore monoculture communities with high biomass that varied among species. Aboveground biomass of Zizania caducifolia (853.6±58.2) g·m^-2·a^-1 was significantly higher than those of Scirpus tabernaemontani (730.7±7.8) g·m^-2·a^-1, and Heleocharis liouana (338.9±32.6) g·m^-2·a^-1. In addition of a general trend of increase with rising mean monthly temperatures, their litter decomposition rates differed. The decomposition rate value k of Heleocharis liouana (0.067±0.0026) was the largest, followed by Zizania caducifolia (0.062±0.0072) and Scirpus tabernaemontani (0.039±0.0062). Meanwhile, after one-year decomposition, the litter residual was (62.0±8.8)%, (47.5±9.0)% and (44.5±7.9)% for Scirpus tabernaemontani, Zizania caducifolia and Heleocharis liouana respectively. Further analysis showed that the annual retention of aboveground biomass of Scirpus tabernaemontani (453.1±4.9) g·m^-2·a^-1 was significantly higher than those of Zizania caducifolia (405.4±27.7) g·m^-2·a^-1 and Heleocharis liouana (150.9±14.5) g·m^-2·a^-1. These results indicated that litter decomposition rate of the lakeshore plants were low under the chilly and humid condition of Napahai wetland. Consequently a large amount of biomass of lakeshore plants could be accumulated into the soil in the form of organic matter, which served as a carbon sink function in such ecosystem. This study obtained a primary picture on carbon sink function and carbon sink process in Napahai wetland in the northwestern Yunnan Plateau and further study on plant-specific processes and their roles is needed to reveal the carbon sequestration processes and functions in this region.