Abstract Species’ traits and environmental conditions determine the abundance of tree species across the globe. The extent to which traits of dominant and rare tree species differ remains untested across a broad environmental range, limiting our understanding of how species traits and the environment shape forest functional composition. We use a global dataset of tree composition of >22,000 forest plots and 11 traits of 1663 tree species to ask how locally dominant and rare species differ in their trait values, and how these differences are driven by climatic gradients in temperature and water availability in forest biomes across the globe. We find three consistent trait differences between locally dominant and rare species across all biomes; dominant species are taller, have softer wood and higher loading on the multivariate stem strategy axis (related to narrow tracheids and thick bark). The difference between traits of dominant and rare species is more strongly driven by temperature compared to water availability, as temperature might affect a larger number of traits. Therefore, climate change driven global temperature rise may have a strong effect on trait differences between dominant and rare tree species and may lead to changes in species abundances and therefore strong community reassembly.