Understanding how natural and anthropogenic disturbances affect the structure and functioning of marine ecosystems is central to predicting future dynamics. Placentia Bay is an Ecologically and Biologically Significant Area (EBSA) in the North Atlantic exposed to multiple stressors (e.g., rising sea surface temperatures, tanker traffic, and aquaculture). To investigate changes in the community and functional structure of soft-sediment macrofauna as well as environmental drivers of observed variation, we compared contemporary (2019–2020) and historical (1998) samples at eight stations (n = 77) collected 21 years apart. Although community and functional structure differed between these time points, functional traits were maintained (i.e., no loss of 36 trait modalities). Overall, 37% of species/taxa were only observed in either the historical or contemporary community, and the contemporary community exhibited lower macrofaunal density but had similar richness, resulting in higher evenness and diversity. Highly tolerant subsurface deposit feeders having small body sizes (< 10 mm) and direct development dominated the historical community. The contemporary community had nearly equal proportions of surface and subsurface deposit feeders with small to medium body sizes (< 10–50 mm) with pelagic larvae, and the proportion of highly tolerant species/taxa was reduced. These changes likely reflect the reduction in polychaetes (91 vs. 58%) and increased bivalves (4 vs. 25%) relative to the historical time point. Community variation was driven by changes in the sedimentary habitat. Contemporary versus historical sediments were ~ 4.5x coarser (possibly due to storms) with higher levels of sedimentary organic matter. This work contributes to advancing the understanding of relationships between benthic macrofauna, functional traits, and the sedimentary habitat in coastal environments.