Functional traits of mountain grassland communities strongly depend upon temperature variation along elevational gradients. However, little is known to what degree the direction of such trait-temperature relationships is shaped by other environmental factors or land-use types. Here, we investigated context-dependent patterns of plant functional trait variation in alpine grassland communities. Specifically, we tested whether temperature (degree-days) variation along an elevational gradient, interacts with water availability, soil properties and land-use type to moderate such patterns. We used cover-abundance and plant-trait data from 236 grassland relevés of the Swiss Alps along an elevational range of 500–2400 m a.s.l. with plant traits being specific leaf area (L), seed releasing height (H) and seed mass (S). We used indices capturing different dimensions of plant functional diversity as response variables, i.e. community weighted mean (CWM), trait range (TR) and functional dispersion (FDis). Land-use type and water availability interacted significantly with degree-days determining the responses of multiple plant traits community attributes. Specific leaf area (CWML) and seed releasing height (CWMH) increased with temperature in meadows and pastures, while no significant trend was detected in fallows. In meadows, seed mass (CWMS) increased and was at the same time less constrained (higher TRS) with increasing temperature. In pastures and fallows, by contrast, no seed trait-temperature trends were detected. In addition, water availability interacted with increasing temperature affecting functional dispersion: FDisL decreased only in sites with higher site water balance and TRS and FDisS increased in sites with low mean summer precipitation. Our findings suggest that functional diversity of grasslands might respond to climate warming with strong ecological differences depending on land-use types and water availability. Based on our results, managed meadows and pastures most likely change in direction to species with more acquisitive strategies, whereas in fallows, no specific trajectory of change is expected.