Abstract Most of the carbon accumulated into peatlands is derived from Sphagnum mosses. During peatland development, the relative share of vascular plants and Sphagnum mosses in the plant community changes, which impacts ecosystem functions. Little is known on the successional development of functional plant traits or functional diversity in peatlands, although this could be a key for understanding the mechanisms behind peatland resistance to climate change. Here we aim to assess how functionality of successive plant communities change along the autogenic peatland development and the associated environmental gradients, namely peat thickness and pH, and to determine whether trait trade‐offs during peatland succession are analogous between vascular plant and moss communities. We collected plant community and trait data on successional peatland gradients from post‐glacial rebound areas in coastal Finland, Sweden and Russia, altogether from 47 peatlands. This allowed us to analyse the changes in community‐weighted mean trait values and functional diversity (diversity of traits) during peatland development. Our results show comparative trait trade‐offs from acquisitive species to conservative species in both vascular plant and Sphagnum moss communities during peatland development. However, mosses had higher resistance to environmental change than vascular plant communities. This was seen in the larger proportion of intraspecific trait variation than species turnover in moss traits, while the proportions were opposite for vascular plants. Similarly, the functional diversity of Sphagnum communities increased during the peatland development, while the opposite occurred for vascular plants. Most of the measured traits showed a phylogenetic signal. More so, the species common to old successional stages, namely Ericacae and Sphagna from subgroup Acutifolia were detected as most similar to their phylogenetic neighbours. Synthesis. During peatland development, vegetation succession leads to the dominance of conservative plant species accustomed to high stress. At the same time, the autogenic succession and ecological engineering of Sphagna leads to higher functional diversity and intraspecific variability, which together indicate higher resistance towards environmental perturbations.