Functional traits play a key role in driving plant community effects on ecosystem function. We examined nine functional traits in various palm (Arecaceae) species and their relationships with moisture, tree-fall gaps, slope, and forest type at 29 transects (500×5 m) in the northeastern region of the Colombian Amazon. Redundancy analysis of mean trait values of species within a plot weighted by their abundance and Pearson correlations were used to evaluate the relationships between traits and environmental factors. The community trait composition was correlated with local environmental factors, which explained 23% of the trait variance. We detected functional dominance of the tallest palms in soils with high moisture and in floodplain forests (p ≤0.05). Palms with relatively long leaves were dominant in the flooded forests. Acaulescent and small palms were dominant on high slopes, and in terra firme forests, long-petioled palms were dominant in forest gaps. The number of seeds per fruit was not correlated with any environmental variable. Thus, hydrology is one of the main drivers of the functional composition of neotropical palm communities at the local scale, segregating tall palms with competitive and evasive strategies from small understory palms, which are mainly stress tolerant.