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High‐altitude ecosystems of the Tibetan Plateau are undergoing significant global changes that may stimulate an intense shrub encroachment. The occurrence of shrubs in alpine meadow is commonly thought to alleviating environmental stresses and supporting high diversity which may have important consequences for ecosystem functions. However, few studies have assessed whether and how the role of shrubs interact with season and elevation.In this study, we explored the effects of the shrub, Dasiphora fruticosa, on microbial (α‐ and β‐) diversity and the consequences for ecosystem functions (multifunctionality and the turnover of functions) at five sites along an elevation gradient and across three seasons on the Tibetan Plateau.According to linear mixed‐effect models and structural equation modelling, D. fruticosa altered season and elevation effects and tended to increase microbial α‐diversity, soil carbon–nitrogen (C:N) ratio, understorey biomass and leaf dry matter content, which overall increased soil multifunctionality. We also found that indicators of soil multifunctionality were always positively related to fungal α‐diversity, whereas negatively related to bacterial α‐diversity.Furthermore, the effects of season, elevation, shrub and their interactions on microbial β‐diversity can be explained by temperature, soil water content, pH and understorey biomass, as shown by distance‐based redundancy analysis. Then, we found that D. fruticosa strongly altered the effects of season and elevation on microbial β‐diversity and the turnover of soil C:N ratio, understorey biomass and litter quality, thus influencing ecosystem function turnover.Our results, thus, provided explicit evidences that Dasiphora fruticosa could alter season and elevation effects on species diversity with important consequences on ecosystem functions, highlighting the crucial role of the shrub in affecting ecosystem functions by creating heterogeneous microbial communities and microenvironments in alpine meadows. Our findings can guide management and improve our knowledge on potential implications of changes in the shrub coverage in alpine meadows. [ABSTRACT FROM AUTHOR]