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Abstract Understanding the drivers of trait selection is critical for resolving community assembly processes. Here, we test the importance of environmental filtering and trait covariance for structuring the functional traits of understory herbaceous communities distributed along a natural environmental resource gradient that varied in soil moisture, temperature, and nitrogen availability, produced by different topographic positions in the southern Appalachian Mountains.To uncover potential differences in community‐level trait responses to the resource gradient, we quantified the averages and variances of both abundance‐weighted and unweighted values for six functional traits (vegetative height, leaf area, specific leaf area, leaf dry matter content, leaf nitrogen, and leaf δ¹³C) using 15 individuals of each of the 108 species of understory herbs found at two sites in the southern Appalachians of western North Carolina, USA.Environmental variables were better predictors of weighted than unweighted community‐level average trait values for all but height and leaf N, indicating strong environmental filtering of plant abundance. Community‐level variance patterns also showed increased convergence of abundance‐weighted traits as resource limitation became more severe.Functional trait covariance patterns based on weighted averages were uniform across the gradient, whereas coordination based on unweighted averages was inconsistent and varied with environmental context. In line with these results, structural equation modeling revealed that unweighted community‐average traits responded directly to local environmental variation, whereas weighted community‐average traits responded indirectly to local environmental variation through trait coordination.Our finding that trait coordination is more important for explaining the distribution of weighted than unweighted average trait values along the gradient indicates that environmental filtering acts on multiple traits simultaneously, with abundant species possessing more favorable combinations of traits for maximizing fitness in a given environment.