Abandonment of pastures and successional shrub expansion are widespread in European mountain regions. Moderate shrub encroachment is perceived beneficial for plant diversity by adding new species without outcompeting existing ones, yet systematic evidence is missing. We surveyed vegetation along 24 transects from open pasture into shrubland across the Swiss Alps using a new protocol distinguishing different spatial scales, shrub cover of each plot (2 × 2 m) and larger-scale zonal cover along the transect. Data were analysed using generalized linear models of shrub cover, shrub species and environmental conditions, such as geology, aspect or soil. Most shrub communities were dominated by Alnus viridis (62% of transects) and Pinus mugo (25%), and the rest by other shrub species (13%). These dominant shrub species explained vegetation response to shrub cover well, without need of environmental variables in the model. Compared to open pasture, A. viridis resulted in an immediate linear decline in plant species richness and a marginal increase in beta-diversity (maximally + 10% at 35% cover). Dense A. viridis hosted 62% less species than open pasture. In P. mugo, species richness remained stable until 40% shrub cover and dropped thereafter; beta-diversity peaked at 35% cover. Hence, scattered P. mugo increases beta-diversity without impairing species richness. In transects dominated by other shrubs, species richness and beta-diversity peaked at 40–60% shrub cover (+ 23% both). A. viridis reduced species richness in a larger area around the shrubs than P. mugo. Therefore, effects of shrub encroachment on plant diversity cannot be generalized and depend on dominant shrub species.