Southeastern (SE) Tibet forms the transition zone between the high interior Tibetan Plateau and the lowlands of southwest China. So understanding the elevation history of SE Tibet, a biodiversity hotspot, enlightens our understanding of the interactions between tectonics, monsoon dynamics and biodiversity. Here we reconstruct the uplift history of the Markam Basin, SE Tibet, during the middle−late Eocene based on U − Pb dating, plant fossil assemblages, and stable and clumped isotope analyses. Our results suggest that the floor of the Markam Basin was at an elevation of 2.6 ± 0.9 km between 42 Ma and 39 Ma, where the mean annual air temperature (MAAT) was 13.2 ± 2.4 °C. The basin then rose rapidly to 3.8 (+0.6/−0.8) km before 36 Ma. Integrated with existing paleoelevation data, we propose that the high plateau boundary (∼3.0 km) of SE Tibet formed during the late Eocene. Numerical climate modeling with realistic paleo-landscapes shows that with the rise of SE Tibet, a Mediterranean-like climate developed in the region characterized by bi-modal precipitation with two wet seasons in boreal spring and autumn. The high topographic relief of SE Tibet, coupled with this distinctive Mediterranean-like climate system, helped develop the high biodiversity of the Hengduan Mountains.