Marine biodiversity is rapidly decreasing worldwide due to anthropogenic impacts such as climate change, habitat fragmentation, and pollution. Assessments of Biodiversity and Ecosystem Functioning have become topical for understanding how changes in biodiversity affect the functioning and services of ecosystems. Our research investigated the influence of macrobenthic fauna on ecosystem functioning in soft sediments of southern Australia. This research introduced a macrobenthic functional trait classification database and implements functional approaches into surveys and experiments to advance the understanding of the macrofauna – ecosystem functioning relationship. Our outcomes revealed habitat-mediated differences in spatial and temporal functional patterns. Changes in the relationships between macrobenthic fauna, functional traits, and environmental conditions between the survey locations indicated site and habitat specific ecosystem functioning. Our results provided further evidence of the strong correlation between macrobenthic fauna, their functional traits and sediment biogeochemistry, which demonstrated that bioturbating macrofauna could remediate hostile conditions (i.e. sulfide-rich) in sediment within several weeks. This research provides key knowledge to advance functional assessments in southern temperate regions and highlights the pivotal role of macrobenthic organisms and their functional traits for ecosystem functioning, which can be applied to improve management and conservation.