Alpine grasslands are sensitive to grazing and atmospheric deposition of nitrogen (N). With the increase of N deposition, experimental investigations of the effects of grazing on alpine grassland vegetation with the background of N deposition are scarce. In this study, we examined the effects of overgrazing and overgrazing with N deposition on eco-physiologies of alpine grassland plants at the functional group level. We found that both overgrazing and overgrazing with N deposition obviously changed species composition and the dominance of three plant functional groups (PFGs) in alpine meadow and alpine steppe. Under overgrazing and overgrazing with N deposition treatment, forb tended to be predominant in the whole plant community, while grass and sedge dominance was obviously decreased. In addition, we found that the underlying eco-physiological processes that lead to forb-dominant were different under overgrazing and overgrazing with N deposition. Overgrazing with N deposition obviously tended to increase forb dominance both directly by selective herbivory and indirectly by enhancing forb photosynthetic capacity. Our results suggested that long-term overgrazing with N deposition will lead to a more favorable living environment for forbs, making the grassland community of alpine grasslands on the Qinghai-Tibetan Plateau likely shift to forb-dominant in the future.