Functionally distinct species (i.e. species with unique trait combinations in the community) can support important ecological roles and contribute disproportionately to ecosystem functioning. Yet, how functionally distinct species have responded to recent climate change and human exploitation has been widely overlooked. Here, using ecological traits and long-term fish data in the North Sea, we identified functionally distinct and functionally common species, and evaluated their spatial and temporal dynamics in relation to environmental variables and fishing pressure. Functionally distinct species were characterized by late sexual maturity, few, large offspring, and high parental care, many being sharks and skates that play critical roles in structuring food webs. Both functionally distinct and functionally common species increased in abundance as ocean temperatures warmed and fishing pressure decreased over the last three decades; however, functionally distinct species increased throughout the North Sea, but primarily in southern North Sea where fishing was historically most intense, indicating a rebound following fleet decommissioning and reduced harvesting. Yet, some of the most functionally distinct species are currently listed as threatened by the IUCN and considered highly vulnerable to fishing pressure. Alarmingly these species have not rebounded. This work highlights the relevance and potential of integrating functional distinctiveness into ecosystem management and conservation prioritization.