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Rising temperatures and increasingly frequent soil droughts are reshaping forest ecosystems, driving shifts in species composition. These shifts may substantially alter canopy structure and microclimate, with potential implications for trees' net carbon uptake under warmer temperatures. Yet, their effects remain poorly understood. We investigated how species composition influences canopy size, microclimate, photosynthetic and respiratory thermal acclimation, and key foliar functional traits in mature beech (Fagus sylvatica L.) and oak (Quercus pubescens Willd.) across a beech-oak ecotone at the warm edge of beech’s distribution in Switzerland. We found that canopy structure and microclimate differed markedly between pure and mixed forest stands, with beech exhibiting larger canopies and air cooling in the pure stand, while oak showed taller canopies and improved microclimate in the mixture. These structural differences drove species-specific vertical patterns in leaf functional traits, with beech exhibiting greater phenotypic plasticity than oak. Across species and stand types, respiration rates were consistently higher at the top of the canopy, underscoring the role of structural and functional acclimation in regulating carbon fluxes. In contrast, microclimatic gradients within the canopy had little influence on the thermal acclimation of photosynthesis and respiration in either species. Overall, our findings reveal that species composition significantly shapes canopy architecture, microclimate, and leaf functional traits, with important implications for the resilience of beech and oak trees at their warm range margins, where climate impacts are expected to be more severe.