The alpine meadow ecosystem, as the main ecosystem of the Qinghai-Tibet Plateau, has been heavily degraded over the past several decades due to overgrazing and climate change. Although soil microorganisms play key roles in the stability and succession of grassland ecosystems, their response to grassland degradation has not been investigated at spatial scale. Here, we systematically analyzed the spatial turnover rates of soil prokaryotic and fungal communities in degraded and undegraded meadows through distance-decay relationship (DDR) and species area relationship (SAR), as well as the community assembly mechanisms behind. Although the composition and structure of both fungal and prokaryotic communities showed significant changes between undegraded and degraded meadows, the steeper spatial turnover rates were only observed in fungi. Mantel tests indicated that edaphic variables and vegetation factors showed significant correlations to the fungal community only in degraded meadow, suggesting soil and vegetation heterogeneity contributed to the steeper spatial scaling pattern. Correspondingly, a novel phylogenetic null model analysis (iCAMP) demonstrated that environmental selection was enhanced in the fungal community assembly process during meadow degradation. Interestingly, dispersal limitation was also enhanced for the fungal community in the degraded meadow, and its relative percentages showed a significant linear increase with the spatial distance, suggesting that dispersal limitation played a greater role as distance increased. Our findings indicated the spatial scaling of the fungal community is altered during meadow degradation by both niche selection and dispersal limitation. This study provides a new perspective for the assessment of soil microbial responses to vegetation changes in alpine areas.