Enhanced shrub growth and expansion are widespread responses to climate warming in many arctic and alpine ecosystems. Warmer temperatures and shrub expansion could cause major changes in plant community structure, affecting both species composition and diversity. To improve our understanding of the ongoing changes in plant communities in alpine tundra, we studied interrelations among climate, shrub growth, shrub cover and plant diversity, using an elevation gradient as a proxy for climate conditions. Specifically, we analyzed growth of bilberry (Vaccinium myrtillus L.) and its associated plant communities along an elevation gradient of ca. 600 vertical meters in the eastern European Alps. We assessed the ramet age, ring width and shoot length of V. myrtillus, and the shrub cover and plant diversity of the community. At higher elevation, ramets of V. myrtillus were younger, with shorter shoots and narrower growth rings. Shoot length was positively related to shrub cover, but shrub cover did not show a direct relationship with elevation. A greater shrub cover had a negative effect on species richness, also affecting species composition (beta-diversity), but these variables were not influenced by elevation. Our findings suggest that changes in plant diversity are driven directly by shrub cover and only indirectly by climate, here represented by changes in elevation.