The biodiversity-ecosystem functioning paradigm is a cornerstone of ecological theory. We do not know, however, whether strong environmental filtering in marginal seascapes interrupts these widely accepted relationships between structure and function, formulated in relatively benign, high diversity, systems. We used marginal coral reefs in eastern Australia as model seascapes to test whether the taxonomic and functional dimensions of fish diversity respond similarly to reef diversity, complexity and context under environmental filtering, or whether the dimensions of biodiversity decouple responding to habitat features, and stress gradients, in distinct ways or differing scales. We surveyed fish diversity on 13 reefs over six consecutive years, and quantified variation in stressor gradients, benthic composition, terrain features, seascape attributes and conservation status of each reef. Taxonomic beta diversity was linked to reduced coral richness and increased reef area, while functional beta diversity was negatively correlated with river proximity. Total abundance was driven by river proximity and conservation status, whereas species richness was positively correlated with coral cover and richness. Spatial decoupling was observed across all metrics, including functional and family-level diversity. This resulted in site-specific dominance patterns in fish assemblages, shaped by the filtering regimes of individual reefs. We show that strong environmental filtering can lead to systematic decoupling between dimensions of biodiversity. We suggest that the spatial management of marginal reefs, and the reorganising of high-latitude reefs of the future, will require consideration of the interplay between community dominance, and the structural and functional aspects of diversity in filtered seascapes.