Chinese cordyceps (or caterpillar fungus, Cordyceps sinensis), an expensive medicinal organism, is collected intensively every spring. It is concluded that over-collection has caused vegetation and soil degradation. However, most descriptions of the ecological impact of collection were qualitative and the impact on plant communities has not been quantified precisely. Collection plots and control plots were established in three counties on the Tibetan Plateau in order to measure impacts of collection on plant community composition. The results showed that due to Chinese cordyceps collection, species diversity expressed as the Shannon—Wiener indices significantly decreased by 10–13%, community dominance expressed as the Berger—Parker indices significantly increased by 17–32%, vegetation cover significantly decreased by 11–19% and aboveground biomass significantly decreased by 21–46%. However, root biomass did not change significantly, and only a few soil physical and chemical indicators in some plots changed significantly. Although Chinese cordyceps collection caused ecological degradation, the undisturbed plant roots and soil guarantee vegetation recovery. Aboveground biomass was the most sensitive variable to Chinese cordyceps collection, and could be used as the evaluation indicator in efforts of ecological protection and recovery.