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Abstract Recent work has shown that evaluating functional trait distinctiveness, the average trait distance of a species to other species in a community offers promising insights into biodiversity dynamics and ecosystem functioning. However, the ecological mechanisms underlying the emergence and persistence of functionally distinct species are poorly understood. Here, we address the issue by considering a heterogeneous fitness landscape whereby functional dimensions encompass peaks representing trait combinations yielding positive population growth rates in a community. We identify four ecological cases contributing to the emergence and persistence of functionally distinct species. First, environmental heterogeneity or alternative phenotypic designs can drive positive population growth of functionally distinct species. Second, sink populations with negative population growth can deviate from local fitness peaks and be functionally distinct. Third, species found at the margin of the fitness landscape can persist but be functionally distinct. Fourth, biotic interactions (positive or negative) can dynamically alter the fitness landscape. We offer examples of these four cases and guidelines to distinguish between them. In addition to these deterministic processes, we explore how stochastic dispersal limitation can yield functional distinctiveness. Our framework offers a novel perspective on the relationship between fitness landscape heterogeneity and the functional composition of ecological assemblages.