Taxonomic diversity metrics are, at best, proxies for the inter- and intraspecific trait differences that mechanistically underlie the insurance effect of biodiversity—that diversity enhances and stabilises aggregate ecosystem properties. In theory, variation in functional (e.g., biomass) responses to environmental change can buffer and maintain ecosystem functioning. This variation, termed response diversity, is therefore a potentially critical determinant of ecological stability. However, response diversity has yet to be widely quantified, possibly due to difficulties in its measurement. Even when it has been measured, approaches have varied. Here, we review methods for measuring response diversity and propose a methodological framework for quantifying response diversity from experimental or observational data, which can be practically applied in lab and field settings across a range of taxa. Our approach, which is based on environment-dependent functional responses to any biotic or abiotic environmental variable, is conceptually simple and robust to any form of environmental response, including nonlinear responses. By capturing even subtle inter- or intraspecific variation in environmental responses, and environment-dependencies in response diversity, we hope this framework will motivate tests of the diversity-stability relationship from a new perspective, and provide an approach for mapping, monitoring, and protecting this critical element of biodiversity.