Understanding the complex effects of biotic and abiotic factors on the composition of vegetation is very important for developing and implementing strategies for promoting sustainable grassland development. The vegetation-disturbance-environment relationship was examined in degraded alpine grasslands in the headwater areas of three rivers on the Qinghai-Tibet Plateau in this study. The investigated hypotheses were that (1) the heterogeneity of the vegetation of the alpine grassland is due to a combination of biotic and abiotic factors and that (2) at a small scale, biotic factors are more important for the distribution of alpine vegetation. On this basis, four transects were set along altitudinal gradients from 3,770 to 3,890 m on a sunny slope, and four parallel transects were set along altitudinal gradients on a shady slope in alpine grasslands in Guoluo Prefecture of Qinghai Province, China. It was found that biological disturbances were the major forces driving the spatial heterogeneity of the alpine grassland vegetation and abiotic factors were of secondary importance. Heavy grazing and intensive rat activity resulted in increases in unpalatable and poisonous weeds and decreased fine forages in the form of sedges, forbs, and grasses in the vegetation composition. Habitat degradation associated with biological disturbances significantly affected the spatial variation of the alpine grassland vegetation, i.e., more pioneer plants of poisonous or unpalatable weed species, such as Ligularia virgaurea and Euphorbia fischeriana, were found in bare patches. Environmental/abiotic factors were less important than biological disturbances in affecting the spatial distribution of the alpine grassland vegetation at a small scale. It was concluded that rat control and light grazing should be applied first in implementing restoration strategies. The primary vegetation in lightly grazed and less rat-damaged sites should be regarded as a reference for devising vegetation restoration measures in alpine pastoral regions.