Thaumatopteris (Goeppert) Nathorst is a typical dipterid fern in the early Mesozoic, showing global significances for palaeoclimate, phytogeography and biostratigraphy. However, the detailed understanding on the relationship between species diversity and the environmental background of this genus is still unclear. Here, we reinvestigated new collections and type specimens of Thaumatopteris contracta Li et Tsao collected from the Upper Triassic of Yunnan Province, and analysed the systematic, diversity variations and tempospatial distribution patterns of Thaumatopteris in China. An emendation was proposed for species diagnosis of Thaumatopteris contracta based on both sterile and fertile pinnae. Our analysis demonstrates that the genus Thaumatopteris reached a higher diversity and differentiation with 11 species during the Late Triassic in China and suffered a severe loss of species diversity across the Triassic-Jurassic transition. Changes in the spatial distribution pattern of Thaumatopteris demonstrate an ecological response to local environment degradation in the Upper Yangtze region. The destruction of habitat and the block of the transport channel of warm moist flow from the Tethys Ocean caused by the Indosinian tectonic movement, especially, the uplift of the Longmen Mountains may represent the potential environmental trigger.