Understanding the way plants respond to their environment is a central aim in plant ecology, as these responses are what fundamentally influence ecosystem function. Plant functional traits describe morphological, physiological, and phenological characteristics that affect overall plant fitness through their influence on survival, growth, and reproduction. Functional traits are heralded as a dynamic, representative, and simple way to capture plant response and predict ecosystem processes. In recent years, there has been a focus on understanding trait patterns that emerge along abiotic environmental gradients, however there is little research on the role of the biotic environment, a key aspect underpinning plant co-existence. This study aimed to address whether there is, in fact, a functional trait response to biotic influences, in an experimental forest, or if responses are due to microclimate alone. This research took place at the Australian Forest Evenness Experiment (AFEX), Using this experimental forest provides a unique opportunity to investigate neighbourhood interactions, where the density and spatial patterning of individuals is the result of experimental manipulation, rather than a consequence of variation in abiotic conditions. Four species, Eucalyptus regnans, Eucalyptus delegatensis, Pomaderris apetala and Acacia dealbata, were measured for six plant functional traits: specific leaf area (SLA), leaf dry matter content (LDMC), predawn water potential (˜í¬Æleaf), bark thickness, foliar nitrogen content (Nleaf), and the leaf area to sapwood area ratio (LA:SA). I found that neighbourhood interactions influence plant functional traits in ways that are highly dependent on the species involved. The effect of traits was often not mediated by microclimate although competition for light was common. I demonstrated that the functional traits of E. delegatensis, particularly those related to water relations, were significantly altered in the presence of P. apetala neighbours, indicating a strong competitive interaction between the two species for water. E. regnans, on the other hand, did not adjust its traits in response to P. apetala. In contrast, E. delegatensis and E. regnans did not display strong trait responses to the neighbourhood effect of the other, and therefore may not be directly competing. In fact, E. regnans may be providing a facilitative influence in this case. The information gathered in this study demonstrates that plant functional traits dictate plant responses to ththe biological environment, and that these responses are not solely dependent on the abiotic environment.