The Habitats Directive (HD) and the Natura 2000 network establish a common framework for maintaining European natural habitats in a favourable conservation status and represent the main instrument used by conservation decision makers in the European Union. Habitat conservation status depends on the sum of the influences acting upon the habitat and its typical species that may affect its long-term natural distribution, structure and functions. Thus, ecosystem functioning is influenced by the diversity, number and functional traits of the species occurring in a habitat. Although the HD establishes that representative species should be selected to reflect favourable structure and functioning of the habitat type, it would not be realistic to associate species with all aspects of structure and functioning given the variability of Annex I habitats. This constraint led us to seek new approaches that allow a more direct assessment of the ecosystem functioning for natural habitats in space and time. We propose a remote sensing-based approach to characterize and assess the ecosystem functioning of habitats. As a case study, we applied our approach to three Mediterranean natural habitat types from the Iberian Peninsula included in Annex I of the Habitats Directive, i.e., Mediterranean sclerophyllous forest, Mediterranean deciduous forest and Sub-Mediterranean and temperate scrub. First, we estimated two key descriptors of ecosystem functioning derived from the Enhanced Vegetation Index and related them to primary production dynamics by using satellite images captured by the MODIS sensor for each year between 2001 and 2012. Second, we arranged these functional descriptors in two-dimensional space and calculated the distances from the habitats assessed to the reference sites, i.e., habitat patches that showed an optimal conservation status of composition and structure. Then, the distances were averaged over the period, and the habitats were categorized according to their mean distances as favourable or unfavourable-inadequate or unfavourable-bad, as outlined in the reporting guidelines under Article 17 of the Directive. Our approach provides new procedures to assess ecosystem functions across space and time, while complying with reporting obligations derived from the HD.