The relative contribution of bryophytes to plant diversity, primary productivity, and ecosystem functioning increases towards colder climates. Bryophytes respond to environmental changes at the species level, but because bryophyte species are relatively difficult to identify, they are often lumped into one functional group. Consequently, bryophyte function remains poorly resolved. Here, we explore how higher resolution of bryophyte functional diversity can be encouraged and implemented in tundra ecological studies. We briefly review previous bryophyte functional classifications and the roles of bryophytes in tundra ecosystems and their susceptibility to environmental change. Based on shoot morphology and colony organization, we then propose twelve easily distinguishable bryophyte functional groups. To illustrate how bryophyte functional groups can help elucidate variation in bryophyte effects and responses, we compiled existing data on water holding capacity, a key bryophyte trait. Although plant functional groups can mask potentially high interspecific and intraspecific variability, we found better separation of bryophyte functional group means compared with previous grouping systems regarding water holding capacity. This suggests that our bryophyte functional groups truly represent variation in the functional roles of bryophytes in tundra ecosystems. Lastly, we provide recommendations to improve the monitoring of bryophyte community changes in tundra study sites.