Understanding how biodiversity and ecosystem functioning respond to changes in the environment is fundamental to the maintenance of ecosystem function. In realistic scenarios, the biodiversity-ecosystem functioning path may account for only a small share of all factors determining ecosystem function. Here, we investigated the strength to which variations in environmental characteristics in a Neotropical savanna affected functional diversity and decomposition. We sought an integrative approach, testing a number of pairwise hypotheses about how the environment, biodiversity, and functioning were linked. We used structural equation modelling to connect fire frequency, soil fertility, exchangeable Al, water availability, functional diversity of woody plants, tree density, tree height, and litter decomposition rates in a causal chain. We found significant effects of soil nutrients, water availability, and Al on functional diversity and litter decomposition. Fire did not have a significant direct effect on functional diversity or litter decomposition. However, fire was connected to both variables through soil fertility. Functional diversity did not influence rates of litter decomposition. The mediated effects that emerged from pairwise interactions are encouraging not only for predicting the functional consequences of changes in environmental variables and biodiversity, but also to caution against predictions based on only environmental or only biodiversity change.