Qinghai-Tibetan plateau being the third pole of the earth, has global ecological significance and plays a considerable role as a watershed of major rivers of the region. Approximately 85% of the plateau comprises alpine grasslands, thus acting as a major pool for livestock grazing and providing many other ecosystem services. Over the past few decades, grassland deterioration has been the consequence of overgrazing and some other additional factors. Grassland degradation triggers adverse changes in the physical and chemical properties of the soil, which ultimately influence soil microbes. Soil microbes play a significant role in nutrition and other bio-geochemical cycling of the soil. This paper aims to explore the correlation between grassland degradation, soil microbes, and the key factors affecting the diversity of soil microbial carbon metabolism. The BIOLOG Eco microplate method was applied to analyze the community level physiological profile (CLPP) of soil microbes. In this study, we investigated the soil microbial community functional diversity profile for different types of alpine wetlands and meadows including alpine wetlands, swamp meadows, alpine meadows, and degraded and artificially restored meadows. Soil samples from the above grasslands were collected during August 2015. The BIOLOG plates were incubated at 25℃, and color development in each well was noted as optical density (OD) at 595 nm with a plate reader over a 7-d period, i.e., 24, 48, 72, 96, 120, 144, and 168 h. The variation in utilization rates of soil microbes was analyzed from 14 restoration plots with varying degrees of disturbances/degradation of 5 types of land, including wetlands, swamp wetlands, meadows, and degraded and restored meadows from the Maqu region of Gansu Province. The metabolic activity of the soil microbial community amidst different soils of various meadows was significantly different. During the process of wetland drying, microbial activity progressively increased, and the soil microbial activity was highest in the swamp meadow. Nonetheless, Microbial activity decreased gradually with meadow degradation. Sandy grasslands exhibited the lowest microbial activity, while the reseeded grasslands portrayed increased microbial activity. These results signified that degradation had a promising effect on the functional diversity of microbial carbon metabolism. However, artificial reseeding slightly increased soil microbial activity depicting that microorganism utilize polymers, amino acids, and carbohydrates as the main carbon sources. The BIOLOG data recorded at 144 h were subjected to the redundancy analysis, and the results showed that C/N ratio, total soil organic carbon, total soil nitrogen, soil bulk density, N/P ratio, pH, and plant coverage are the key factors affecting microbial function diversity. The given results elucidate that microbial diversity in swamp wetlands was the highest because of its more suitable soil nutrient status and higher vegetation cover. On the contrary, degraded meadow caused by changes in soil nutrients and physical properties created a hostile milieu for soil microbial activity. It is therefore elucidated that by monitoring soil microbial community not only predicts the status of soil and vegetation nutrition status but also reflect a theoretical basis for the restoration and improvement of degraded alpine wetlands and meadows of the Qinghai-Tibetan Plateau.