While climate change is rapidly impacting marine species and ecosystems worldwide, the effects of climate warming on coastal fish nurseries have received little attention despite nurseries’ fundamental roles in recruitment and population replenishment. Here, we used a 26‐year time series (1987–2012) of fish monitoring in the Bay of Somme, a nursery in the Eastern English Channel (EEC), to examine the impacts of environmental and human drivers on the spatial and temporal dynamics of fish functional structure during a warming phase of the Atlantic Multidecadal Oscillation (AMO). We found that the nursery was initially dominated by fishes with r‐selected life‐history traits such as low trophic level, low age and size at maturity, and small offspring, which are highly sensitive to warming. The AMO, likely superimposed on climate change, induced rapid warming in the late 1990s (over 1°C from 1998 to 2003), leading to functional reorganization of fish communities, with a roughly 80% decline in overall fish abundance and increased dominance by K‐selected fishes. Additionally, historical overfishing likely rendered the bay more vulnerable to climatic changes due to increased dominance by fishing‐tolerant, yet climatically sensitive species. The drop in fish abundance not only altered fish functional structure within the Bay of Somme, but the EEC was likely impacted, as the EEC has been unable to recover from a regime shift in the late 1990s potentially, in part, due to failed replenishment from the bay. Given the collapse of r‐selected fishes, we discuss how the combination of climate cycles and global warming could threaten marine fish nurseries worldwide, as nurseries are often dominated by r‐selected species.