The analysis of species distribution and functional diversity (FD) in natural gradients of aridity and temperature at high altitudes could provide indication of future changes in plant communities as both are responsive to environment and strongly influence ecosystem functioning and stability. We established eleven altitudinal transects in high altitude region of western Himalaya, six of which represented north aspect and the rest represented south aspect. In each transect, vegetation was sampled randomly at every 200 m elevation to estimate species rarity, niche width and different FD indices [community-weighted mean traits (CWM), functional richness (FRic), functional divergence (FDiv), functional dispersion (FDis) and functional specificity (FSpe)]. These indices indicate resource utilization, competition for resources, optimal plant strategies, and presence of functionally specialist species. We found a total of 418 plant species, most of which were having narrow niche and distribution. Proportion of species with narrow niche was high at higher elevations, 36.5% species were rare with 17% of them being endemic to Himalaya. At south aspect, lower values of CWM plant height along with lower FRic, FDiv, FDis, and FSpe were recorded. Further, CWM plant height, FRic, FDiv, FDis and FSpe significantly decreased with increasing elevation. Influence of gradients of aridity (aspect) and decreasing temperature (elevation) on species distribution and FD suggest that functioning of high altitude communities is very likely to be affected in future. Our findings therefore emphasize that the plant communities present at higher elevations are more vulnerable under climate change.