Shrub encroachment into grasslands can greatly alter soil organic carbon (SOC), nitrogen (N) cycling processes, and carbon (C) pools. However, the effects of shrub encroachment on the soil microbial community and its feedback on the chemical composition of SOC are not well understood in the alpine ecosystems. This study aims to evaluate the impact of the encroachment of the shrubs Salix cupularis and Hippophae rhamnoides on SOC, soil microbial biomass C (MBC) and N (MBN), microbial community structure, and enzyme activities of the topsoil (0–30 cm) and explore the underlying mechanisms in the eastern Tibetan Plateau grasslands of China. We found that while SOC increased under both S. cupularis (16.0 % increase) and H. rhamnoides (23.3 % increase), only the increase in H. rhamnoides was significant in comparison with the adjacent grass soils. The recalcitrant C pool increases were not significant in S. cupularis or H.rhamnoides soils. Additionally, shrub encroachment significantly increased the soil organic N and the activities of N-acetyl-β-glucosaminidase (NAG) and leucine aminopeptidase (LAP). Shrub encroachment significantly increased MBC and MBN, as well as enhanced the total bacteria PLFAs, gram-negtive bacteria PLFAs, arbuscular mycorrhizal fungi, actinomycetes, and hydrolytic enzyme activities, but suppressed the ratio of total fungi to total bacteria PLFAs and phenol oxidase activity in comparison with grassland communities. Redundancy analysis (RDA) showed that litterfall mass, litter N, and root N were the main factors affecting the soil microbial community. Our findings highlight that the encroachment of shrub H. rhamnoides tends to increase soil C sequestration as a result of the high quantities of plant litter input and the changes in the composition of soil microbial communities as well as increased complex C compounds in soil organic matter.