Grasslands cover over 50% of the Qinghai–Tibetan Plateau (QTP), playing a critical role in water conservation, soil retention, carbon sequestration, biodiversity, and supporting pastoral livelihoods. Due to the high-altitude and cold-climate conditions, the QTP is highly vulnerable to climate change. Understanding the relative importance of the drivers of grassland degradation is essential for developing adaptive management strategies. While numerous studies have explored these drivers, the impacts of large-scale ecological restoration efforts since 2000, particularly across different grassland types and degradation-recovery phases, remain underexplored. This study analyzes 40 years of grassland vegetation dynamics on the QTP, identifying key inflection points and classifying regions into four ‘degradation-restoration’ trajectory types. The effects of climatic and anthropogenic drivers across distinct temporal phases are quantified. The results indicate that 6.56% of grasslands are in continuous degradation, while 28.97% are at risk of potential degradation risk. Drought and grazing emerge as the primary drivers of vegetation change, while restoration and afforestation programs play a significant role in enhancing recovery. Our findings underscore the spatiotemporal variability of grassland responses and emphasize the need for targeted grazing management and integrated water resource planning to optimize restoration outcomes. This study provides a framework for differentiated grassland management in the face of climate change and human pressures on the QTP.