Surface uplift at the southeastern margin of the Tibetan Plateau has been widely studied, but more palaeoaltimetry data are required to better understand the elevation history of this geologically complex region. In this study, fossil leaves of Abies (Pinaceae), a cool-temperate element, recovered from the latest Miocene–Pliocene Yangyi Formation of the southern Baoshan Basin, were used as a proxy to estimate the local palaeoelevation. Based on the regional modern altitude range (2100–4280 m) of the genus as well as regional temperature discrepancy (1.5 °C) between the past and present, the palaeoelevation of the study area was calculated to be > 2360 m above sea level as compared to 1670 m at present. Our result suggests that the southern Baoshan Basin experienced pronounced uplift prior to the time of fossil deposition, probably as a result of crustal shortening and thickening of the northern Baoshan Terrane during the Eocene–Oligocene. We infer that surface growth in areas south of the Dali Basin may have been greater than previously interpreted, and that a widespread plateau or plateau patches higher than 2000 m probably extended southwards into at least the Baoshan Basin by the latest Miocene–Pliocene. We also infer that the elevation of the southern Baoshan Basin has decreased by at least 690 m since then, in contrast to most other scenarios in which the elevation of the southeastern margin of the Tibetan Plateau has increased or remained close to modern levels since the late Miocene. The major cause of the inferred altitude decline is likely tectonic deformation. As a transtensional graben basin, the Baoshan Basin has experienced pull-apart and base-fall movement since the late Miocene, which would reduce the altitude of its southern part located on the hanging wall. Surface erosion associated with the increased summer rainfall might also have played a role especially in reducing the local relief, although its contribution can be limited. Our study provides one of the few palaeoelevation estimates from areas south of the Dali Basin and an example of past elevation loss at the southeastern margin of the Tibetan Plateau, thus shedding important light on the landscape evolution of this region.