Simple Summary It is an important objective of ecological restoration to select suitable plant species in order to construct plant communities and achieve certain soil and water conservation capacities. Using species functional traits to construct a response-and-effect framework is a promising method for determining how species in changing environments will influence ecosystem functions. Here, we investigated plant functional traits, soil properties, and ecohydrological functions for the most common vegetation restoration types in mid-Yunnan, China, and used seven plant functional traits to identify seven plant functional effect types in relation to soil and water conservation capacity, and two plant functional response types to soil physicochemical properties. The results indicated that specific leaf area was the key trait not only for functional effect types, but also for functional response types. In addition, eight overlapping species between plant functional response types and functional effect types were selected as the key restoration species. These results provide a methodological guide for species selection for recovery, as well as a species inventory for the restoration of degraded ecosystems in this region. Great efforts have been made to improve the soil and water conservation capacity by restoring plant communities in different climatic and land-use types. However, how to select suitable species from local species pools that not only adapt to different site environments, but also achieve certain soil and water conservation capacities is a great challenge in vegetation restoration for practitioners and scientists. So far, little attention has been paid to plant functional response and effect traits related to environment resource and ecosystem functions. In this study, together with soil properties and ecohydrological functions, we measured the seven plant functional traits for the most common species in different restoration communities in a subtropical mountain ecosystem. Multivariate optimization analyses were performed to identify the functional effect types and functional response types based on specific plant traits. We found that the community-weighted means of traits differed significantly among the four community types, and the plant functional traits were strongly linked with soil physicochemical properties and ecohydrological functions. Based on three optimal effect traits (specific leaf area, leaf size, and specific root length) and two response traits (specific leaf area and leaf nitrogen concentration), seven functional effect types in relation to the soil and water conservation capacity (interception of canopy and stemflow, maximum water-holding capacity of litter, maximum water-holding capacity of soil, soil surface runoff, and soil erosion) and two plant functional response types to soil physicochemical properties were identified. The redundancy analysis showed that the sum of all canonical eigenvalues only accounted for 21.6% of the variation in functional response types, which suggests that community effects on soil and water conservation cannot explain the overall structure of community responses related to soil resources. The eight overlapping species between the plant functional response types and functional effect types were ultimately selected as the key species for vegetation restoration. Based on the above results, we offer an ecological basis for choosing the appropriate species based on functional traits, which may be very helpful for practitioners involved in ecological restoration and management.