Climate change was already shown to increase species numbers in high elevations. In contrast, grazing might interfere with climate change effects. To disentangle both the effects remains a major challenge of alpine ecology. The present study investigated both the effects on species diversity along an elevation gradient in the Austrian Central Alps. We aimed to answer the following questions: How do species diversity and frequency of subalpine–alpine–subnival plant communities change in grazed sites with time? Do competitive plant species increase in the communities? How does grazing exclusion affect species diversity, functional groups, and strategy types? Are environmental changes (temperature, sunshine duration, precipitation) responsible for diversity changes or does grazing override climate effects? The study was carried out for 18 years along an elevation gradient from 1,958 to 2,778 m a.s.l. at Obergurgl (Tyrol, Austria), including six different plant communities. A total of 11 grazing exclusions were established. At each community, the frequency of the species was counted in 1 m2 plots yearly or at least every 3–4 years. Environmental data were obtained from the weather station Obergurgl. Changes of the community parameters and the species composition were analyzed by partial redundancy analyses and mixed-effect models. Species diversity increased with time at all grazed sites, but this increase was suppressed under grazing exclusion. Grazing exclusion effects became pronounced after 5 years. The most consistent result was the increase of bryophytes throughout. At the subalpine grassland, tall-growing species expanded in the exclosures; at the upper alpine Carex curvula grassland, snow bed species decreased with grazing exclusion. Among the environmental factors, sunshine duration of the previous year’s autumn quartal was found to be the essential variable for the changes. We concluded that diversity increases in grazed communities of the Austrian Central Alps can be attributed to climate change. An indication of slightly reduced and altered weather effects under grazing exclusion was found.