As an analogue for predicting the future climate, Pliocene climate and its driving mechanism attract much attention for a long time. Late Miocene-Pliocene red clay sequence on the main Chinese Loess Plateau (CLP) has been widely applied to reconstruct the history of interior aridification and Asian monsoon climate. However, the typical red clay sequences deposited on the planation surface of Tibetan Plateau are rare. Recently, continuous red clay has been found on the uplifted Xiaoshuizi peneplain in the Maxian Mountains, northeastern (NE) Tibetan Plateau (TP). To reconstruct the late Miocene-early Pliocene climate history of NE Tibetan Plateau and to assess the regional differences between the central and western CLP, multiple climatic proxies were analyzed from the Xiaoshuizi red clay sequence. Our results demonstrate the minimal weathering and pedogenesis from 6.7 to 4.8 Ma, which implicates that the climate was sustained arid. We speculate that precipitation delivered by the paleo-Asian Summer Monsoon (ASM) was limited during this period, and instead the intensification of the westerlies circulation resulted in arid condition in the study region. Subsequently, enhanced weathering and pedogenesis occurred during the interval of 4.8–3.6 Ma, which attests to increasing effective moisture. Thus, we ascribe the obvious arid-humid climate transition near 4.8 Ma to the palaeo-ASM expansion. Increasing Arctic temperatures, the vast poleward expansion of the tropical warm pool into the subtropical regions and water freshening in the subtropical Pacific in response to the closure of the Panamanian Seaway may have been responsible for the thermodynamical enhancement of the paleo-ASM system, which permitted more moisture to be carried to the NE Tibetan Plateau.