Sustainably managing natural resources under climate change requires understanding how species distribution shifts can impact ecosystem structure and functioning. While numerous studies have documented changes in species’ distributions and abundances in response to warming, the consequences for the functional structure of ecosystems (i.e., composition of species’ functional traits) have received less attention. Here, using thirty years of fish monitoring, we show that two connected North Atlantic ecosystems (E. English Channel and S. North Sea) underwent a rapid shift in functional structure triggered by a climate oscillation to a prevailing warm-phase in the late-1990s. Using time-lag-based causality analyses, we found that rapid warming drove pelagic fishes with r-selected life history traits (e.g., low age and size at maturity, small offspring, low trophic level) to shift abruptly northward from one ecosystem to the other, causing an inversion in functional structure between the two connected ecosystems. While we observed only a one-year time-lag between the climate oscillation and the functional shift, indicating rapid responses to a changing environment, historical overfishing likely rendered these ecosystems susceptible to climatic stress, and declining fishing in the  North Sea may have exacerbated the shift. This shift likely had major consequences for ecosystem functioning due to potential changes in biomass turnover, nutrient cycling, and benthic-pelagic coupling. Under ongoing warming, climate oscillations and extreme warming events may increase in frequency and severity, which could trigger functional shifts with profound consequences for ecosystem functioning and services.