Permafrost degradation has been widely reported on the Tibetan Plateau (TP). However, directly observed evidence of permafrost thawing processes and degradation rates are very limited, although it is expected to be prevalent near the periphery of a permafrost area. Here, we report permafrost changes and disappearance in the Qilian Mountains (northeastern TP) based on three boreholes instrumented along a 100 m transect during 2014–2021. Our results show that permafrost has significantly degraded in the study area: the mean downward thawing rate from the permafrost table was about 0.16 m per year while the mean upward thawing rate from the permafrost base was about 0.23 m per year. We estimate the mean lateral degradation rate of permafrost in this area was ∼4.14 m per year. More dramatically, the 1.5 m thick permafrost layer at one of the boreholes thawed completely between April of 2018 and December of 2019. Our results indicate that changes in climatic condition may have played only a limited role in controlling the active layer thickness in the vicinity of the altitudinal limit of permafrost; moisture content and soil conditions play key roles in site-specific permafrost thawing. This study provides new quantitative insights for understanding changes near the altitudinal limit of permafrost, and we suggest that land surface models or Earth system model studies of the lateral heat exchanges should be implemented in order to better represent permafrost thawing processes. © 2022 The Authors