One of the greatest challenges for ecological restoration is to identify which species will establish, co-exist, and perform the desired suite of services to re-establish ecosystem function. To accomplish this task, many ecologists have advocated for a trait-based approach to restoration. Functional traits are increasingly being employed to gain a deeper understanding of ecological processes, such as stress response and competition. Trait differences among species could be used during restoration to select species that achieve desired restoration outcomes, such as drought and invasion resistance. Here, I examine which traits should confer drought and invasion resistance, considering recent theoretical developments in functional ecology. I then present the results of various studies from California grasslands that demonstrate how effectively (or not) traits can predict drought and invasion resistance, and what this suggests for restoration of these degraded systems. Finally, I highlight areas where we need to improve our understanding of using a trait-based approach for ecological restoration. In particular, we need to pay more attention to how traits interact with multiple ecological filters, such as drought and invasion. Moreover, we need to consider that the importance of ecological filters can change over time in a restored community, which means that planting strategies should be designed with both short- and long-term success in mind.