The responses of photosynthesis to change of temperature and CO2 concentration are divergent among various alpine plant species at high altitude regions; however, very few direct in situ measurements have been conducted to compare photosynthetic capacity among different functional plants along altitude gradients in the Qinghai‐Tibet Plateau (QTP). This study measured the net photosynthetic assimilation rate (An), maximum carboxylation rate (Vcmax), maximum electron transport rate (Jmax), stomatal conductance (gs) and mesophyll conductance (gm) for CO2 of three plant functional types (PFTs, sedge, grass and shrub) and functional traits at different altitudes in the Qinghai Lake watershed during growing season. Meanwhile we simulated An of the PFTs under potential future scenario. Results indicate that grass maintain a relatively stable An by decreasing Vcmax, Jmax, ratio of Jmax to Vcmax (J/V) and gs, while slightly increasing gm with increasing altitudes. In contrast, the An of sedge and shrubs increased with rising Vcmax, Jmax, gs and gm values, resulting in a large increment in the An at low altitudes. Grass was less sensitive to temperature by reducing the supply of CO2, while sedge and shrub increased. Ca was a more dominant factor than Ta in affecting the An of grass. The order of rising An in PFTs was shrub > sedge > grass, and the An of alpine meadow was found to increase more under the Representative Concentration Pathways (RCP) 4.5 and 8.5 scenarios. Our results indicate that grass may be more resistant to future warming and suggested that considering PFTs is of great significance for improving the simulating of the response of vegetation physiological and ecological processes to future climate change in alpine regions.