Climate change and anthropogenic activities have significantly contributed to the degradation of wet meadows on the Qinghai-Tibet Plateau (QTP). Soil nitrogen (N) availability is a crucial determinant of the productivity of wet meadow vegetation. Furthermore, soil microbial nitrogen functional genes (NFGs) are critical in the transformation of soil N. Nevertheless, the dynamics of NFGs in response to vegetation degradation, as well as the underlying drivers, remain poorly understood. In this study, wet meadows at varying levels of vegetation degradation on the QTP, categorized as non-degraded (ND), slightly degraded (SD), moderately degraded (MD), and heavily degraded (HD), were examined. Soil samples from depths of 0 to 10 cm and 10 to 20 cm were collected during different growth cycles (June 2020, August 2020, and May 2021). The analysis focused on NFGs involved in organic nitrogen fixation (nifH), archaeal and bacterial ammonia oxidation (amoA-AOA and amoA-AOB, respectively), and nitrite reduction (nirK), utilizing real-time fluorescence quantitative PCR. Our findings indicate a significant decline in the abundance of NFGs with intensified vegetation degradation, exhibiting notable spatial and temporal fluctuations. Specifically, the relative NFGs followed the pattern: nirK > amoA-AOA > amoA-AOB > nifH. Redundancy analysis revealed that vegetation cover was the primary regulator of NFGs abundance, accounting for 56.1%-57% of the variation. Additionally, soil total nitrogen, pH, and total phosphorus content were responsible for 38.5%, 28.2%, and 7% of the variability in NFGs, respectively. The (amoA-AOA + amoA-AOB + nirK) ratios associated with effective N transformation indicated that the vegetation degradation process moderately increased the nitrification potential.