Fine-scale spatial heterogeneity influences biodiversity and ecosystem productivity at many scales. In savanna systems, Macrotermes termites, through forming spatially explicit mounds with unique woody plant assemblages, emerge as important sources of such heterogeneity. Despite a growing consensus regarding the importance of functional diversity (FD) to ecosystem processes, no study has quantified how termite mounds affect woody plant FD. We address whether termite mounds alter the distribution of functional traits, and increase FD of woody plant communities within Africa's largest savanna woodland, the 2.7 million km2 miombo system. Using plant traits that change according to soil resources (for example, water and nutrients), and disturbance (for example, fire and elephant herbivory), we identified response functional groups and compared relative representation of these groups between mound and matrix habitats. We also asked whether mound and matrix habitats differed in their contribution to FD within the system. Although species representing most functional groups were found in both mound and matrix habitats, relative abundance of functional groups differed between mound and matrix. Mound plant assemblages had greater response diversity to soil resources than matrix plots, but there was no difference in response diversity to disturbance. High trait values on mounds included tree height, leaf nitrogen, phosphorus, and palatability. Species with root ectomycorrhizae dominated the matrix. In conclusion, these small patches of nutrient-enriched substrate emerge as drivers of FD in above-ground woody plant communities.