Our objectives are to examine the effects of hummock–depression spatial heterogeneity on plant communities and soil properties, and to understand the process of maintaining and adjusting microtopography-mediated hydrological inputs and their spatial fluctuations that produce obvious microhabitats. We set up 36 plots (1 m × 1 m) and sampled 45 plant and 225 soil samples in flooded (FH) and non-flooded hummocks (NFH) and depressions of the marshy, and the surrounding non-wetland meadows as well as in the Yellow River Source Zone, west China. We evaluated whether the alpine marshy wetland has a fertile island effect by the comparison method. Our results show that hummock presence can increase the spatial heterogeneity of the microhabitat and promote the plant diversity and soil fertility of the Kobresia tibetica community. Plant height, coverage, above-ground biomass, species richness and diversity were significantly higher in the FH and NFH microhabitat than in the areas between hummocks and surrounding non-wetland meadows. Compared with broad alpine meadows, the hummock–depression complex provided a microhabitat favorable to the growth of Cyperaceae. In the 0–50 cm soil layer, the closer the soil layer was to the ground surface, the higher its soil organic carbon and total nitrogen contents. Thus, in deeper layers, the gap between soil nutrients in wetland hummock–depression microhabitat and in the surrounding alpine meadows becomes smaller. Hence, the wetland hummock–depression microhabitat formed a fertile island pattern. Therefore, these results contribute toward improving our understanding of ecosystem restoration in alpine marshy meadows.