In recent decades, symbiotic nitrogen-fixing plants such as the alder (Alnus spp.) have widely expanded into northern peatlands, because of climate warming and associated soil drying. To assess the changes in plant community composition and biomass following the expansion of N_2-fixing plants in northern peatland ecosystems, we compared the differences in species diversity and aboveground plant biomass in Alnus sibirica tree islands and the adjacent open peatlands in the northern area of Da'xingan Mountain in Northeast China. Our results showed that A. sibirica tree islands had greater aboveground plant biomass as well as lower species richness, Simpson index, Shannon-Wiener index, and Pielou index than the open peatlands did. At the species level, Betula fruticosa in the A. sibirica tree islands had higher aboveground plant biomass than those in the open peatlands did, whereas Eriophorum vaginatum, Smilacina trifolia, Sphagnum palustre, Aulacomnium androgynum, Polytrichum commune, and Cladonia rangiferina in the A. sibirica tree islands had lower aboveground plant biomass than those in the open peatlands did. At the plant functional group level, the A. sibirica tree island had greater deciduous shrub biomass and lower biomass of grass, moss, and lichen than the open peatlands did, albeit there was no significant difference in the aboveground biomass of evergreen shrubs. The dominance of the deciduous shrub, evergreen shrub, grass, moss, and lichen in the A. sibirica tree islands was lower than that in the open peatlands was, owing to the huge amount of A. sibirica biomass. These results suggest that despite an increase in aboveground plant biomass, the expansion of N_2-fixing woody plants to the northern peatlands causes loss of mosses and lichen and drastically reduces biodiversity, which would exert marked effects on ecosystem structure and function.