Understanding how ecosystem functioning is impacted by global change drivers is a central topic in ecology and conservation science. We need to assess not only how environmental change affects species richness, but also how the distribution of functional traits (i.e. functional diversity) mediate the relationship between species richness and ecosystem functioning. However, most evidence about the capacity of functional diversity to explain ecosystem functioning has been developed from studies conducted at a single spatial scale. Here, we explore theory, expectations and evidence for why and how species richness and functional diversity relationships vary with spatial scale. Despite the importance of accounting for spatial processes at multiple scales, we show that most studies of the species richness–functional diversity relationship focus on single scale analyses that ignore spatial context. Thus, we discuss the need to establish a spatially explicit, multi-scale framework for understanding the relationship between species richness and functional diversity. As a starting point to developing such a framework, we detail some expected trajectories and mechanisms by which the diversity of species and functional traits may change across increasing spatial scales. We also explore what is known about two important gaps in the literature about this relationship: 1) the influence of spatial autocorrelation on community assembly processes and 2) the variation in the structure of species interactions across spatial extents. We present some key challenges that could be addressed by integrating approaches from community and landscape ecology. This information will help improve our understanding of the relative influence of local and large-scale processes on community structure, while providing a foundation for improving biodiversity monitoring, policy and ecosystem function based conservation.