1. The linkages and mechanisms influencing biodiversity, primary productivity, and soil carbon stability in grassland ecosystems under the impact of climate change remain unclear. 2. In this study, we analyzed soil organic carbon mineralisation, plant species diversity, productivity, soil nutrients, microbial communities, and climatic variables using a large-scale belt transect field survey spanning over 2,000 km across the Mongolian Plateau. Additionally, soil organic carbon mineralisation potential was assessed through laboratory incubation experiments. Correlation regression analysis and structural equation modeling (SEM) were employed to investigate the relationships between these factors and their driving pathways associated with soil organic carbon mineralisation and species diversity. 3. The results indicated that (1) aboveground biomass (AGB) was increased through the two contrary strategies: species diversity may either increase or decrease, with the lowest community AGB recorded at Shannon-Wiener indices of 1.14 and 2.19, as well as Simpson indices of 0.49 and 0.72. (2) The direct drivers of plant diversity were soil pH, soil organic carbon (SOC), and mean annual temperature (MAT), with reductions in these factors contributing to variations in plant diversity. (3) Perennial grass functional groups primarily determined grassland productivity, whereas perennial forbs functional groups played a dominant role in influencing plant species diversity within the community. (4) The primary driver of potential soil organic carbon mineralisation was microbial biomass carbon (MBC), with mean annual precipitation (MAP) regulating MBC via SOC. (5) SOC exhibited contrasting effects on plant species diversity and SOC mineralisation. 4. Synthesis Our finding suggest that the properties of SOC pools are important factors driving contrasting change in grassland plant species diversity and organic carbon mineralisation.