Our understanding of how environmental heterogeneity shapes plant community dynamics is largely based on above-ground diversity despite the importance of seed banks as reservoirs of genetic and taxonomic diversity that buffer plant populations and influence vegetation following disturbance. Using a plant functional trait approach, this study examined the importance of fire-related germination cues and environmental determinants of plant community turnover in wet forests of south-eastern Australia – forests of both high conservation value and the focus of current timber harvesting. We surveyed extant vegetation, soil seed banks, forest structure and edaphic properties across 62 sites burnt in 1939 and not subsequently affected by wildfire or logging. A total of 46 families, and 99 species were identified in extant vegetation with 43 and 126 respectively in the soil seed bank, with only 32% of species co-occurring in both species’ pools. Despite historically long fire return intervals, the soil seed bank demonstrated a clear positive response to fire-related germination cues (heat in combination with smoke) that were concentrated in hard-seeded species dispersed by ants. Seeds from early successional species showed no response to fire cues, while species typical of the wetter margins of these forests were killed by high heat. The soil seed bank was dominated by species associated with early successional stages, consistent with the initial floristics model of succession. Woody species were largely restricted to extant vegetation and replacement is most likely to occur from future seed rain. Spatially structured environmental heterogeneity shaped plant turnover with the relative strength of environmental controls differing among functional types and pools of diversity. Differential response of the combined species pool relative to extant vegetation demonstrates that the soil seed bank provides a storage effect. Forest management practices that generate patchy and heterogenous environments, including the intensity of regeneration burns and density of overstorey species, will benefit biodiversity conservation through overstorey structural controls on resource availability and diversity of understorey vegetation, that is transferred to soil seed banks via tight abiotic controls and seed inputs.