Aim Plant functional groups are widely used in community ecology and earth system modelling to describe trait variation within and across plant communities. However, this approach rests on the assumption that functional groups explain a large proportion of trait variation among species. We test whether four commonly used plant functional groups represent variation in six ecologically important plant traits. Location Tundra biome. Time period Data collected between 1964 and 2016. Major taxa studied 295 tundra vascular plant species. Methods We compiled a database of six plant traits (plant height, leaf area, specific leaf area, leaf dry matter content, leaf nitrogen, seed mass) for tundra species. We examined the variation in species‐level trait expression explained by four traditional functional groups (evergreen shrubs, deciduous shrubs, graminoids, forbs), and whether variation explained was dependent upon the traits included in analysis. We further compared the explanatory power and species composition of functional groups to alternative classifications generated using post hoc clustering of species‐level traits. Results Traditional functional groups explained significant differences in trait expression, particularly amongst traits associated with resource economics, which were consistent across sites and at the biome scale. However, functional groups explained 19% of overall trait variation and poorly represented differences in traits associated with plant size. Post hoc classification of species did not correspond well with traditional functional groups, and explained twice as much variation in species‐level trait expression. Main conclusions Traditional functional groups only coarsely represent variation in well‐measured traits within tundra plant communities, and better explain resource economic traits than size‐related traits. We recommend caution when using functional group approaches to predict tundra vegetation change, or ecosystem functions relating to plant size, such as albedo or carbon storage. We argue that alternative classifications or direct use of specific plant traits could provide new insights for ecological prediction and modelling.