Forested tropical landscapes around the world are being extensively logged and converted to agriculture, with serious consequences for biodiversity and potentially ecosystem functioning. Here we investigate associations between habitat disturbance and functional diversity of ants and termites—two numerically dominant and functionally important taxa in tropical rain forests that perform key roles in predation, decomposition, nutrient cycling and seed dispersal. We compared ant and termite occurrence and composition within standardised volumes of soil and dead wood in old growth forest, logged forest and oil palm plantation in Sabah, Malaysian Borneo. Termites occurred substantially less frequently in converted habitats than in old growth forest, whereas ant occurrences were highest in logged forest and lowest in old growth forest. All termite feeding groups had low occurrence in disturbed habitats, with soil feeders occurring even less frequently than wood feeders. Ant functional groups showed more variable associations, with some opportunist and behaviourally dominant groups being more abundant in degraded habitats. The importance of ants and termites in tropical ecosystems and such differing patterns of assemblage variation suggest that ecosystem functioning may be significantly altered in converted habitats.