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Tropical species richness is threatened by habitat degradation associated with land‐use conversion, yet the consequences for functional diversity remain little understood. Progress has been hindered by difficulties in obtaining comprehensive species‐level trait information to characterize entire assemblages and insufficient appreciation that increasing land‐cover heterogeneity potentially compensates for species loss. We examined the impacts of tropical deforestation associated with land‐use heterogeneity on bird species richness, functional redundancy, functional diversity, and associated components (i.e., alpha diversity, species dissimilarity, and interaction strength of the relationship between abundance and functional dissimilarity). We analyzed over 200 georeferenced bird assemblages in the Atlantic Forest of Brazil. We characterized the functional role of the species of each assemblage and modeled …