The diversity–productivity relationship in grasslands is predominantly positive but also highly variable because of its complex influencing mechanisms in natural ecosystems. In this study, we investigated plant diversity, biomass, and associated drivers (e.g., climate, soil, and plant traits) along an elevational gradient in grasslands in southwest China. Grassland biomass decreased significantly, but grassland diversity increased with increasing elevation. Consequently, a significant negative relationship between grassland biomass and diversity was detected along the elevational gradient. We also observed that the negative relationship was primarily driven by climatic factors (i.e., temperature and precipitation) and plant stoichiometric traits (i.e., phosphorus limitation) rather than by soil properties at a regional scale. This is inconsistent with previous studies on the positive diversity–productivity relationship, which might weaken the effects of climatic factors at the regional scale. Our results revealed that the negative relationship between diversity and productivity in grasslands was shaped by the combined effects (climate and plants) on productivity and diversity in grasslands.