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Aim: We analyse the consequences of species extinctions and introductions on the functional diversity and composition of island bird assemblages. Specifically, we ask if introduced species have compensated the functional loss resulting from species extinctions. Location: Seventy‐four oceanic islands (> 100 km2) in the Atlantic, Pacific and Indian Oceans. Time period: Late Holocene. Major taxa studied: Terrestrial and freshwater bird species. Methods: We compiled a species list per island (extinct and extant, native and introduced), and then compiled traits per species. We used single‐trait analyses to assess the effects of past species extinctions and introductions on functional composition. Then, we used probabilistic hypervolumes in trait space to calculate functional richness and evenness of original versus present avifaunas of each island (and net change), and to estimate how functionally unique are extinct and introduced species on each island. Results: The net effects of extinctions and introductions were: an increase in average species richness per island (alpha diversity), yet a decline in diversity across all islands (gamma diversity); an average increase in the prevalence of most functional traits, yet an average decline in functional richness and evenness, associated with the fact that extinct species were functionally more unique (when compared to extant natives) than introduced species. Main conclusions: Introduced species are on average offsetting (and even surpassing) the losses of extinct species per island in terms of species richness, and they are increasing the prevalence of most functional traits. However, they are not compensating for the loss of functional richness due to extinctions. Current island bird assemblages are becoming functionally poorer, having lost unique species and being composed of functionally more redundant species. This is likely to have cascading repercussions on the functioning of island ecosystems. We highlight that taxonomic and functional biodiversity should be assessed simultaneously to understand the global impacts of human activities. [ABSTRACT FROM AUTHOR]