Abstract The identification of multiple facets of biodiversity (e.g., phylogenetic and functional) can help to understand how evolutionary and ecological mechanisms shape the assembly of biological communities. Here, we employed multiple regressions and variance partitions to investigate the effects of environmental conditions, connectivity and space on aspects of the functional and phylogenetic facets of fish fauna in tropical headwater streams of the Xingu River basin, in Eastern Amazonia. We found that the functional and phylogenetic diversities of fish communities are related to local environmental conditions and stream connectivity in the drainage network, with marked differences occurring between the rainy and dry periods. Furthermore, we discovered that functional uniqueness was influenced mainly by environmental factors, whereas phylogenetic uniqueness had a more complex relationship with the influence of local environmental factors and connectivity. Our findings indicate that the fish assemblages of small headwater streams of the Xingu River basin share a close phylogenetic history. This is probably because of the climatic and environmental stability experienced by Amazonian ichthyofauna over evolutionary time. Our findings emphasise the role of niche‐based processes in shaping the unique functional composition of fish assemblages in headwater streams, and highlight the importance of environmental heterogeneity in maintaining the ecological integrity of these freshwater ecosystems.