<p>The ternary diagram of functional diversity (TDFD) is a novel framework for biodiversity assessment that jointly and non-independently represents classical (indices combining species richness and abundance) and functional (indices based on species’ functional traits) dimensions of community diversity by partitioning them into three non-independent fractions: quadratic entropy (Q), functional redundancy (R), and Simpson dominance (D). We applied this approach in parallel with traditional methods to characterize community diversity of stream-dwelling macroinvertebrate assemblages and compare assemblages collected from natural and settlement-impacted stream sections. The TDFD indicated that these assemblages in general exhibit low functional redundancy and, consequently, high functional uniqueness, implying that stream macroinvertebrates deliver many unique functions rather than a few functions supported by high redundancy. We also found that the Simpson dominance fraction (D), which captures the classical diversity component, exhibited the widest range among the tree fractions, indicating that classical diversity explains most of the observed community variability. Settlements influenced the TDFD fractions overall, but effects were stream specific. Our results suggest that small settlements affect both classical and functional diversity dimensions of macroinvertebrate assemblages in a context-dependent manner. Overall, the TDFD provides insights into community diversity that is not detected by traditional approaches.</p>