Plant functional types across environmental gradients can be considered as a powerful proxy that reveals vegetation–environment relationships. The objectives of this study were to investigate the response in the relative abundance of plant functional types along altitudinal gradients and to examine the relationship of plant functional types to environmental variables. The study was conducted in the Gughe-Amaro Mountains, in the south-west Ethiopian highlands. We established 74 plots with an area of 400 m2 (20 × 20 m) each along altitudinal ranges between 1000 and 3000 m asl. Data on site environmental conditions and on the abundance of plant functional types were analysed using the constrained linear ordination technique (RDA) in order to identify the relationships between plant functional types and environmental variables. Altitude, soil organic carbon, soil sand fraction and surface stone cover were significantly related to the relative abundance of plant functional types across the gradient. Tussocks and thorns/spines were abundant in lower altitudinal ranges in response to herbivory and drought while rhizomes and rosettes were abundant at higher altitudes in response to the cold. Generally our results show that topographic attributes (altitude and slope) as well as soil organic carbon play an important role in differentiating the relative abundance of plant functional types in the investigated gradient. Thus, considering specific plant functional types would provide a better understanding of the ecological patterns of vegetation and their response to environmental gradients in tropical regions of Africa prone to drought.