Riparian and riverine systems around the world are subject to human mediated degradation. It is increasingly recognized that rehabilitation of these systems is important to retain biodiversity and important ecosystem services. Plant functional traits represent a potentially useful but underutilized tool in the restoration or rehabilitation of ecosystems such as riparian systems. This study uses a functional trait approach to provide insight into the changes in ecosystem function that have occurred with the loss of native plant species and their replacement by exotics. We examined the plant functional traits associated with extinct native, extant native and extant exotic species in the riparian margin of the Hunter River, New South Wales, Australia. Comparisons of 11 traits were conducted using univariate (analysis of variance and χ2) and multivariate (principal component analysis and analysis of similarity) methods. Both extant native and extant exotic species had traits associated with a short lived, ruderal strategy: high specific leaf area (SLA), soft leaves, herbaceous growth forms and therophyte life form. In contrast, extinct native species had traits such as low SLA, tough leaves, tree and shrub growth form and phanerophyte life form. This shift in plant trait assemblages associated with the transition from a native to predominately exotic flora has important implications for ecosystem processes in this riverine system. We suggest that such a functional trait approach can be integrated with knowledge of other ecosystem components to provide an understanding of ecosystem function that can be used to guide rehabilitation initiatives.