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Questions: What is the functional trait variation of European temperate grasslands and how does this reflect global patterns of plant form and function? Do habitat specialists show trait differentiation across habitat types? Location: Europe. Methods: We compiled 18 regeneration and non‐regeneration traits for a continental species pool consisting of 645 species frequent in five grassland types. These grassland types are widely distributed in Europe but differentiated by altitude, soil bedrock and traditional long‐term management and disturbance regimes. We evaluated the multivariate trait space of this entire species pool and compared multi‐trait variation and mean trait values of habitat specialists grouped by grassland type. Results: The first dimension of the trait space accounted for 23% of variation and reflected a gradient between fast‐growing and slow‐growing plants. Plant height and SLA contributed to both the first and second ordination axes. Regeneration traits mainly contributed to the second and following dimensions to explain 56% of variation across the first five axes. Habitat specialists showed functional differences between grassland types mainly through non‐regeneration traits. Conclusions: The trait spectrum of plants dominating European temperate grasslands is primarily explained by growth strategies which are analogous to the trait variation observed at the global scale, and secondly by regeneration strategies. Functional differentiation of habitat specialists across grassland types is mainly related to environmental filtering linked with altitude and disturbance. This filtering pattern is mainly observed in non‐regeneration traits, while most regeneration traits demonstrate multiple strategies within the same habitat type. [ABSTRACT FROM AUTHOR]