Warming has been shown to cause soil carbon (C) loss in northern grasslands owing to accelerated microbial decomposition that offsets increased grass productivity. Yet, a multi-decadal survey indicated that the surface soil C stock in Tibetan alpine grasslands remained relatively stable. To investigate this inconsistency, we analyzed the feedback responses of soil microbial communities to simulated warming by soil transplant in Tibetan grasslands. Whereas microbial functional diversity decreased in response to warming, microbial community structure did not correlate with changes in temperature. The relative abundance of catabolic genes associated with nitrogen (N) and C cycling decreased with warming, most notably in genes encoding enzymes associated with more recalcitrant C substrates. By contrast, genes associated with C fixation increased in relative abundance. The relative abundance of genes associated with urease, glutamate dehydrogenase and ammonia monoxygenase (ureC, gdh and amoA) were significantly correlated with N2O efflux. These results suggest that unlike arid/semiarid grasslands, Tibetan grasslands maintain negative feedback mechanisms that preserve terrestrial C and N pools. To examine whether these trends were applicable to the whole plateau, we included these measurements in a model and verified that topsoil C stocks remained relatively stable. Thus, by establishing linkages between microbial metabolic potential and soil biogeochemical processes, we conclude that long-term C loss in Tibetan grasslands is ameliorated by a reduction in microbial decomposition of recalcitrant C substrates.