Taxonomic nestedness, the degree to which the taxonomic composition of species-poor assemblages represents a subset of richer sites, commonly occurs in habitat fragments and islands differing in size and isolation from a source pool. However, species are not ecologically equivalent and the extent to which nestedness is observed in terms of functional trait composition of assemblages still remains poorly known. Here, using an extensive database on the functional traits and the distributions of 6316 tropical reef fish species across 169 sites, we assessed the levels of taxonomical vs functional nestedness of reef fish assemblages at the global scale. Functional nestedness was considerably more common than taxonomic nestedness, and generally associated with geographical isolation, where nested subsets are gradually more isolated from surrounding reef areas and from the center of biodiversity. Because a nested pattern in functional composition implies that certain combinations of traits may be represented by few species, we identified these groups of low redundancy that include large herbivore-detritivores and omnivores, small piscivores, and macro-algal herbivores. The identified patterns of nestedness may be an outcome of the interaction between species dispersal capabilities, resource requirements, and gradients of isolation among habitats. The importance of isolation in generating the observed pattern of functional nestedness within biogeographic regions may indicate that disturbance in depauperate and isolated sites can have disproportionate effects on the functional structure of their reef fish assemblages.