Islands host a disproportionate fraction of global biodiversity and provide ideal systems for investigating the factors affecting patterns of biodiversity. However, islands are also vulnerable systems and epicenters of biodiversity loss. Clarifying the processes that affect patterns of island biodiversity is important for achieving biodiversity conservation goals. Here, we studied the biodiversity of butterfly assemblages in Zhoushan Archipelago of China. Specifically, we evaluated i) whether functional and taxonomic beta diversity of butterfly communities provides complementary ecological insights; ii) the extent to which nestedness and turnover components contribute to total functional and taxonomic beta diversity; and iii) the relative contributions of island characteristics, spatial and climate factors to shaping functional and taxonomic beta diversity and its components. The contributions of the nestedness and turnover components to total taxonomic beta diversity were similar; by contrast, the relative contribution of the nestedness component to total functional beta diversity was much larger than that of the turnover component. A high nestedness component of both functional and taxonomic beta diversity reflected a nested spatial distribution of butterfly assemblages in Zhoushan Archipelago. Beta diversity decomposition and variation partitioning analysis (VPA) revealed that both functional and taxonomic beta diversity components provided complementary ecological insights. Taxonomic beta diversity and its turnover component were more strongly correlated with island isolation, while functional beta diversity and its turnover component were correlated more strongly with fine-scale spatial factors. VPA showed that island characteristics (e.g., perimeter-to-area ratio and isolation), climatic factors (e.g., temperature and precipitation), and broad-scale and some fine-scale spatial factors jointly contributed to shaping patterns of functional and taxonomic beta diversity of butterfly assemblages and their components. Lower functional beta diversity, especially low functional turnover, in our study indicated functional convergence. This was caused by the high abundance of dominant species. However, rare species can promote trait diversity, trait divergence, and convergence in functional biodiversity. Our study demonstrated that taxonomic and functional beta diversity can provide distinct insights into variation in butterfly communities. Island communities are affected by biogeographical, climate, and historical events. Studies of island communities that consider temporal variation in communities, including the effects of historical events, are needed to achieve a comprehensive understanding of patterns of biodiversity in island communities.