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Abiotic factors are considered strong drivers of species distribution and assemblages. Yet these spatial patterns are also influenced by biotic interactions. Accounting for competitors or facilitators may improve both the fit and the predictive power of species distribution models (SDMs). We investigated the influence of a dominant species, Empetrum nigrum ssp. hermaphroditum , on the distribution of 34 subordinate species in the tundra of northern Norway. We related SDM parameters of those subordinate species to their functional traits and their co‐occurrence patterns with E. hermaphroditum across three spatial scales. By combining both approaches, we sought to understand whether these species may be limited by competitive interactions and/or benefit from habitat conditions created by the dominant species. The model fit and predictive power increased for most species when the frequency of occurrence of E. hermaphroditum was included in the SDMs as a predictor. The largest increase was found for species that 1) co‐occur most of the time with E. hermaphroditum , both at large (i.e. 750 m) and small spatial scale (i.e. 2 m) or co‐occur with E. hermaphroditum at large scale but not at small scale and 2) have particularly low or high leaf dry matter content (LDMC). Species that do not co‐occur with E. hermaphroditum at the smallest scale are generally palatable herbaceous species with low LDMC, thus showing a weak ability to tolerate resource depletion that is directly or indirectly induced by E. hermaphroditum . Species with high LDMC, showing a better aptitude to face resource depletion and grazing, are often found in the proximity of E. hermaphroditum . Our results are consistent with previous findings that both competition and facilitation structure plant distribution and assemblages in the Arctic tundra. The functional and co‐occurrence approaches used were complementary and provided a deeper understanding of the observed patterns by refinement of the pool of potential direct and indirect ecological effects of E. hermaphroditum on the distribution of subordinate species. Our correlative study would benefit being complemented by experimental approaches.