The present study on variability in phytoplankton functional structure through a trait-based approach described the species-trait-environmental relationship and its possible impact on ecosystem functioning. Based on trait similarities 102 phytoplankton species were clubbed into 14 distinct functional groups. Among others, FGs-XI and XII (small size, chain-forming species with medium to high SA:V ratio and space between cells in chain) were the most dominant due to their competitive advantage in resource utilization and avoidance of loss processes. The morphological traits space between cells and cellular protrusion along with temperature and ammonia played a decisive role in their seasonal succession. Eutrophication in Thane Creek favors the dominance of anti-grazing traits which increases the phytoplankton biomass through efficient resource acquisition but can encumber the energy transfer efficiency. The dominance of HAB species impedes ecosystem functioning which raises public health concerns. The strong correlation of environmental variables with phytoplankton functional structure reinforces the practical implementation of a trait-based approach for understanding phytoplankton community dynamics under varying environmental conditions.