Cultural landscapes all over the world harbor species communities that are taxonomically and functionally diverse. In Eastern Europe, but also in many other regions of the world, the conservation of this farmland biodiversity is threatened by land use intensification and abandonment. In order to counteract the negative effects of land use change in such landscapes, a thorough understanding of the functional relationships between species and their environment is crucial. In this study, we investigated the relationship of functional traits of butterfly and bird communities and environmental conditions in 120 sites in traditional farmlands of southern Transylvania, Romania. First, we compared taxonomic diversity (i.e., Shannon diversity) with functional diversity (i.e., functional dispersion), and second, we linked species traits to environmental variables by performing RLQ analyses. Functional traits indicating reproduction, movement, and feeding behavior related with environmental variables describing heterogeneity, amount of woody vegetation, and topography at three different spatial scales. We found positive relationships between taxonomic and functional diversity, as well as strong linkages between species traits and environmental conditions for both groups. Specifically, butterfly composition was most strongly influenced by land use type and life‐history strategies. Bird composition was most strongly related to the amount of woody vegetation and nesting and foraging strategies. We conclude that maintaining the typical features of traditional farming landscapes, especially a small‐scale heterogeneity in arable land and gradients of woody vegetation cover, would be desirable in order to sustain a high functional diversity in southern Transylvania in the future.