Many studies have tried to assess the role of both deterministic and stochastic processes in community assembly, yet a lack of consensus exists on which processes are more prevalent and at which spatial scales they operate. To shed light on this issue, we tested two nonmutually exclusive, scale-dependent hypotheses: (1) that competitive exclusion dominates at small spatial scales; and (2) that environmental filtering does so at larger ones. To accomplish this, we studied the functional patterns of tropical montane forest communities along two altitudinal gradients, in Ecuador and Peru, using floristic and functional data from 60 plots of 0.1 ha. We found no evidence of either functional overdispersion or clustering at small spatial scales, but we did find functional clustering at larger ones. The observed pattern of clustering, consistent with an environmental filtering process, was more evident when maximizing the environmental differences among any pair of plots. To strengthen the link between the observed community functional pattern and the underlying process of environmental filtering, we explored differences in the climatic preferences of the most abundant species found at lower and higher elevations and examined whether their abundances shifted along the elevation gradient. We found (1) that greater community functional differences (observed between lower and upper tropical montane forest assemblies) were mostly the result of strong climatic preferences, maintained across the Neotropics; and (2) that the abundances of such species shifted along the elevational gradient. Our findings support the conclusion that, at large spatial scales, environmental filtering is the overriding mechanism for community assembly, because the pattern of functional clustering was linked to species’ similarities in their climatic preferences, which ultimately resulted in shifts in species abundances along the gradient. However, there was no evidence of competitive exclusion at more homogeneous, smaller spatial scales, where plant species effectively compete for resources.