Tibetan alpine steppes are large and sensitive terrestrial carbon (C) reservoirs that are experiencing desertification due to global change and overgrazing, which can lead to stronger resource limitations for both above- and below-ground communities. Soil nutrients, especially nitrogen (N) and phosphorus (P), are the crucial resources for plant growth and microbial metabolism. However, whether both plant and soil microbial communities in the degraded alpine steppes are limited by these soil nutrients remains unclear, which limits our understanding of the mechanisms of desertification and subsequent ecosystem restoration. Here, we evaluated potential nutrient limitations of the plant and soil microbial communities in the alpine steppe across five stages of desertification using stoichiometry-based approaches. Our results showed that soil microbial metabolism was mainly limited by C and P, and the plant N limitation and microbial C limitation were intensified while the microbial P limitation was relieved during desertification. Plant–soil–microbe interactions had significant impacts on the microbial C and P limitations, explaining 72 and 61% of the variation, respectively. Specifically, desertification ultimately affected microbial metabolic limitations by regulating soil pH, soil nutrients, and the plant N limitation. Moreover, the microbial C limitation further reduced microbial C use efficiency (CUE) with desertification, which is detrimental for organic C retention in the degraded soil. Overall, this study revealed that microbial metabolic limitations through plant–microbe interactions were the key drivers affecting soil microbial CUE, and it provided insights that can advance our knowledge of the microbial regulation of nutrient cycles and C sequestration.