The northeastern Tibetan Plateau is located at the convergence of the Asian winter and summer monsoons and westerlies; thus, this area has witnessed historic climate changes. The Xunhua basin is an intermontane basin on the northeastern margin of the Tibetan Plateau. The basin contains more than 2000 m of Cenozoic fluvial–lacustrine sediments, recording a long history of climate and environmental changes. We collected the mid-Miocene sediments from the Xunhua basin and used palynological methods to discuss the relationship between aridification in the interior of Asia, global cooling, and uplift of the Tibetan Plateau. Based on the palynological analysis of the Xigou section, Xunhua basin, the palynological diagram is subdivided into three pollen zones and past vegetation and climate are reconstructed. Zone I, Ephedripites–Nitraridites–Chenopodipollis–Quercoidites (14.0–12.5 Ma), represents mixed shrub–steppe vegetation with a dry and cold climate. In zone II, Pinaceae–Betulaepollenites–Ephedripites–Chenopodipollis–Graminidites (12.5–8.0 Ma), the vegetation and climate conditions improved, even though the vegetation was still dominated by shrub–steppe taxa. Zone III, Ephedripites–Nitrariadites–Chenopodipollis (8.0–5.0 Ma), represents desert steppe vegetation with drier and colder climate. The palynological records suggest that shrub–steppe dominated the whole Xigou section and the content gradually increased, implying a protracted aridification process, although there was an obvious climate improvement during 12.5–8.0 Ma. The aridification in the Xunhua basin and surrounding mountains during 14.0–12.5 Ma was probably related to global cooling induced by the rapid expansion of the East Antarctic ice-sheets and the relatively higher evaporation rate. During the 12.5–8.0 Ma period, although topographic changes (uplift of Jishi Shan) decreased precipitation and strengthened aridification in the Xunhua basin on leeward slopes, the improved vegetation and climate conditions were probably controlled by the decrease in evaporation rates as a result of continuous cooling. From 8.0 to 5.0 Ma, the rapid development of the desert steppe can be attributed to global cooling and uplift of the Tibetan Plateau.