On the Tibetan Plateau, most tuberculosis is caused by indigenous Mycobacterium tuberculosis strains with a monophyletic structure and high-level drug resistance. This study investigated the emergence, evolution, and transmission dynamics of multidrug-resistant tuberculosis (MDR-TB) in Tibet. The whole-genome sequences of 576 clinical strains from Tibet were analyzed with the TB-profiler tool to identify drug-resistance mutations. The evolution of the drug resistance was then inferred based on maximum-likelihood phylogeny and dated trees that traced the serial acquisition of mutations conferring resistance to different drugs. Among the 576 clinical M. tuberculosis strains, 346 (60.1%) carried at least 1 resistance-conferring mutation and 231 (40.1%) were MDR-TB. Using a pairwise distance of 50 single nucleotide polymorphisms (SNPs), most strains (89.9%, 518/576) were phylogenetically separated into 50 long-term transmission clusters. Eleven large drug-resistant clusters contained 76.1% (176/231) of the local multidrug-resistant strains. A total of 85.2% of the isoniazid-resistant strains were highly transmitted with an average of 6.6 cases per cluster, of which most shared the mutation KatG Ser315Thr. A lower proportion (71.6%) of multidrug-resistant strains were transmitted, with an average cluster size of 2.9 cases. The isoniazid-resistant clusters appear to have undergone substantial bacterial population growth in the 1970s to 1990s and then subsequently accumulated multiple rifampicin-resistance mutations and caused the current local MDR-TB burden. These findings highlight the importance of detecting and curing isoniazid-resistant strains to prevent the emergence of endemic MDR-TB. IMPORTANCE Emerging isoniazid resistance in the 1970s allowed M. tuberculosis strains to spread and form into large multidrug-resistant tuberculosis clusters in the isolated plateau of Tibet, China. The epidemic was driven by the high risk of transmission as well as the potential of acquiring further drug resistance from isoniazid-resistant strains. Eleven large drug-resistant clusters consisted of the majority of local multidrug-resistant cases. Among the clusters, isoniazid resistance overwhelmingly evolved before all the other resistance types. A large bacterial population growth of isoniazid-resistant clusters occurred between 1970s and 1990s, which subsequently accumulated rifampicin-resistance-conferring mutations in parallel and accounted for the local multidrug-resistant tuberculosis burden. The results of our study indicate that it may be possible to restrict MDR-TB evolution and dissemination by prioritizing screening for isoniazid (INH)-resistant TB strains before they become MDR-TB and by adopting measures that can limit their transmission.