A number of studies have shown that added value is obtained by increasing the horizontal resolution of a regional climate model to capture additional fine-scale weather processes. However, the mechanisms leading to this added value are different over areas with complicated orographic features, such as the Tibetan Plateau (TP). To determine the role that horizontal resolution plays over the TP, a detailed comparison was made between the results from the REMO regional climate model at resolutions of 25 and 50 km for the period 1980–2007. The model was driven at the lateral boundaries by the European Centre for Medium-Range Weather Forecasts Interim Reanalysis data. The experiments differ only in representation of topography, all other land parameters (e.g., vegetation characteristics, soil texture) are the same. The results show that the high-resolution topography affects the regional air circulation near the ground surface around the edge of the TP, which leads to a redistribution of the transport of atmospheric water vapor, especially over the Brahmaputra and Irrawaddy valleys—the main water vapor paths for the southern TP—increasing the amount of atmospheric water vapor transported onto the TP by about 5%. This, in turn, significantly decreases the temperature at 2 m by > 1.5 °C in winter in the high-resolution simulation of the southern TP. The impact of topography on the 2 m temperature over the TP is therefore by influencing the transport of atmospheric water vapor in the main water vapor paths.