Exploring the response of plant functional trait to environmental variations is essential to elucidate the adaptation mechanism and community assembly of desert plants under extreme environmental conditions, and more importantly to formulate strategies to protect and restore desert ecosystem. However, previous studies are mostly large scale, and only a few studies have focused on the effects of soil water and salinity on desert plant functional trait and diversity at fine scale. It is known that, even at fine scales, environmental variables (e.g., soil variables) can actually be heterogeneous and affect plant. Therefore, in the present study, we aimed to analyze (1) how morphological, physiological, and chemical functional traits of desert plant, and functional richness, evenness, and dispersion indexes respond to varied soil water and salinity and (2) what community assembly process did functional diversity revealed in different soil water and salinity environment? Three transects were set at 5-km intervals perpendicular to the northern bank of the Aqikesu River in the Ebinur Lake Wetland Nature Reserve (ELWNR). At each transect, the soil gradually changed from saline to sandy soil with the increase in distance from the river. Ten to twelve plots (10×10 m²) were set at an interval of 500 m in each transect. A total of 32 plots were set across the three transects. The geographic data (longitude, latitude, and altitude), number of species, plant abundance (number of individuals of each species), and height of each individual sampled in each plot were recorded. The chlorophyll content (SPAD) was measured by SPAD502, and soil volumetric water content (SVWC) at a depth of 12 cm was measured by time domain reflectometry before sampling. The leaf and soil samples were then collected for further investigation. Based on the investigation and analysis, responses of one morphological (height), one physiological (SPAD) and six chemical functional traits (leaf carbon (C), nitrogen (N), phosphorus (P), sulfur (S), potassium (K), and calcium (Ca) content), and response of multidimensional and single dimensional functional diversities to soil water and salinity were explored. The results showed the following. (1) The community weighted mean height, SPAD, and leaf C and Ca content in high soil water and salinity sites (SW1) were significantly higher than those in low soil water and salinity sites (SW2). The leaf N, P, and S content had no significant differences across the two sites. (2) In SW1 sites, the plant functional trait differences generally decreased along the tree-small tree-shrub-herb life form level, with only leaf N and K content exhibiting significant difference between shrub and herb. Furthermore, plant functional trait showed convergence along the life form level. (3) In SW2 sites, functional trait differences in trees were similar to those in the SW1; the leaf C and N content were significantly higher than those in shrubs and herbs. Furthermore, the SPAD and leaf S content of shrubs were significantly higher than those in herbs, whilst, the leaf K content of shrubs was lower than that in herbs. The height, and leaf C, N, and P content exhibited no significant differences between shrubs and herbs. The plant functional traits among life forms in SW2 site presented a trend of convergence. (4) The multidimensional functional richness (FAD2) and functional divergence (Rao) in SW1 sites were higher than those in SW2 sites, whilst, the functional evenness showed no difference. (5) All single dimensional functional evenness showed no difference between high and low soil water content and salinity; however, functional evenness of chemical trait was generally higher than that of plant height. Furthermore, functional logarithmic variance (FDvar) of leaf N, S, and Ca in SW1 was significantly higher than that of SW2. The study provides references to understand the adaption mechanism of plants subjected to extreme environments and to recover desert plants.