Aim: We analyse how functional diversity (FD) varies across European natural forests to understand the effects of environmental and competitive filtering on plant trait distribution. Location: Forest ecosystems in Europe from 11°W to 36°E and 29.5°N to 62°N. Taxon: Pinaceae, Fagaceae and Betulaceae, Oleaceae, Tiliaceae, Aceraceae, Leguminosae (unspecific). Methods: We adopted the existing Dynamic Global Vegetation Model Lund-PotsdamJena managed Land of flexible individual traits (LPJmL-FIT) for Europe by eliminating both bioclimatic limits of plant functional types (PFTs) and replacing prescribed values of functional traits for PFTs with emergent values under influence of environmental filtering and competition. We quantified functional richness (FR), functional divergence (FDv) and functional evenness (FE) in representative selected sites and at PanEuropean scale resulting from simulated functional and structural trait combinations of individual trees. While FR quantifies the amount of occupied trait space, FDv and FE describe the distribution and abundance of trait combinations, respectively, in a multidimensional trait space. Results: Lund-Potsdam-Jena managed Land of flexible individual traits reproduces spatial PFTs and local trait distributions and agrees well with observed productivity, biomass and tree height of European natural forests. The observed site-specific trait distributions and spatial gradients of traits of the leaf- and stem-resource economics spectra coincide with environmental filtering and the competition for light and water in environments with strong abiotic stress. Where deciduous and needle-leaved trees co-occur, for example, in boreal and mountainous forests, the potential niche space is wide (high FR), and extreme ends in the niche space are occupied (high FDv). We find high FDv in Mediterranean forests where drought increasingly limits tree growth, thus niche differentiation becomes more important. FDv decreases in temperate forests where a cold climate increasingly limits growth efficiency of broad-leaved summer green trees, thus reducing the importance of competitive exclusion. Highest FE was simulated in wet Atlantic and southern Europe which indicated relatively even niche occupation and thus high resource-use efficiency.