This study selected vegetation cover as the main evaluation index, calculated the grassland degradation index (GDI) and established the remote sensing monitoring and evaluation system for grassland degradation in Northern Tibet, according to the National Standard (GB19377-2003), based on the remote sensing data such as NDVI data derived from NOAA/AVHRR with a spatial resolution of 8 km of 1981–2000, from SPOT/VGT with a spatial resolution of 1 km of 2001 and from MODIS with a spatial resolution of 0.25 km of 2002–2004 respectively in this area, in combination with the actual condition of grassland degradation. The grassland degradation processes and their responses to climate change during 1981–2004 were discussed and analyzed in this paper. The result indicated that grassland degradation in Northern Tibet is very serious, and the mean value of GDI in recent 20 years is 2.54 which belongs to the serious degradation grade. From 1981 to 2004, the GDI fluctuated distinctly with great interannual variations in the proportion of degradation degree and GDI but the general tendency turned to severe-grade during this period with the grassland degradation grade changed from light degraded to serious degraded in Northern Tibet. The extremely serious degraded and serious degraded grassland occupied 1.7% and 8.0% of the study area, the moderate and light degraded grassland accounted for 13.2% and 27.9% respectively, and un-degraded grassland occupied 49.2% of the total grassland area in 2004. The grassland degradation was serious, especially in the conjunctive area of Naqu, Biru and Jiali counties, the headstream of the Yangtze River lying in the Galadandong snow mountain and glaciers, the area along the Qinghai-Tibet highway and railway, and areas around the Tanggula and Nianqingtanggula snow mountains and glaciers. So the snow mountains and glaciers as well as their adjacent areas in Northern Tibet were sensitive to climate change and the areas along the vital communication line with frequent human activities experienced relatively serious grassland degradation.