The relationship between herbaceous above ground biomass and species richness typically exhibits a unimodal pattern, shifting from positive under low-precipitation conditions to negative under high-precipitation conditions. While shrub encroachment generally reduces both herbaceous aboveground biomass and diversity, how shrubs mediate the herbaceous biomass-richness relationship under altered precipitation regimes remains unclear. By synthesizing data from globally distributed precipitation manipulation experiments, we reveal contrasting herbaceous biomass-diversity responses in grasslands and shrublands. In grasslands, reduced precipitation shifts the peak of the unimodal herbaceous biomass-richness curve toward lower biomass, whereas increased precipitation shifts it toward greater biomass. In contrast, the peak of the unimodal relationship in shrub-dominated systems shows no significant shifts across precipitation extremes. These global patterns are supported by a 5-year field experiment in a desert steppe in Northern China, which further shows that precipitation change strongly affects species richness through soil water availability in grasslands, while exerting weaker effects through modifications of the fast-slow leaf economics spectrum in shrublands. These findings demonstrate that shrub encroachment can constrain precipitation-induced changes in herbaceous biomass-diversity relationships, providing important insights into how woody plant expansion interacts with climate change to influence ecosystem structure and function.