1. Habitat filtering (HF, trait convergence) and niche differentiation (ND, trait divergence) are known to impact upon plant community structure. Both processes integrate individual responses to the abiotic environment and biotic interactions. Thus, it is difficult to clearly identify the underlying abiotic and biotic factors that ultimately impact community structure by looking at community-level patterns of trait divergence or convergence alone. 2. We used a functional trait-based and multiscale approach to assess how biotic interactions and aridity determine the functional structure of semi-arid shrublands sampled along a large aridity gradient in Spain. At the regional scale, we investigated functional differences among species (axes of specialization) to identify important traits for community assembly. At the community scale, we evaluated the relative impact of HF and ND on community structure using a null model approach. Finally, at the plant neighbourhood scale, we evaluated the impact of biotic interactions on community structure by investigating the spatial patterns of trait aggregation. 3. The shrub species surveyed can be separated along four axes of specialization based on their above-ground architecture and leaf morphology. Our community scale analysis suggested that the functional structure of semi-arid communities was clearly non-random, HF and ND acting independently on different traits to determine community structure along the aridity gradient. At the plant neighbourhood scale, the spatial distribution of species was also clearly not random, suggesting that competition and facilitation impacted on the observed changes in the functional diversity of shrubland communities along the aridity gradient. 4. Synthesis: Our results demonstrated that HF and ND acted simultaneously on independent traits to jointly determine community structure. Most importantly, our multiscale approach suggested that competition and facilitation interplayed with aridity to determine this structure. Competition appeared to be constant along the aridity gradient and explained the high functional diversity observed in semi-arid shrublands. Facilitation affected subordinate and rare species and, thus, may act to enhance the biodiversity of these ecosystems. Finally, the framework employed in our study allows moving forward from the examination of patterns to the development of mechanistic traitbased approaches to study plant community assembly.