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Airborne hyperspectral imaging holds great promise for estimating plant diversity and composition, given its unprecedented combination of aerial coverage, spatial resolution, and spectral detail. Recently, there has been renewed attention toward the spectral variation hypothesis (SVH), which predicts that higher spectral variation is correlated with greater plant diversity. While several studies have highlighted methodological challenges involved with the SVH, there is little consensus about when it yields strong predictions of taxonomic, functional, and phylogenetic diversity. In part, this may be because prior studies have not explicitly considered how underlying environmental gradients drive changes in spectral and species composition. In this study, we tested the SVH separately in open vegetation (i.e. grasses and shrubs) and in forests at five sites across Canada. Generalized additive models revealed that spectral diversity was a better predictor of functional α -diversity than of taxonomic or phylogenetic α -diversity in both vegetation types. Mantel tests and Procrustes analyses revealed weak to moderate associations between spectral and plant β -diversity and composition in open vegetation, and moderate associations in forests. The better fit in forests appeared to be influenced by the presence of an elevational gradient and associated species turnover (from deciduous to coniferous trees); we observed weaker relationships when examining only a subset of this gradient. We suggest that the high variability in the strength of associations between plant and spectral diversity reported to date might be affected by the presence of environmental gradients. Finally, we found that different wavelength bands contributed to spectral α -diversity in open vegetation vs. forests, suggesting different spectral features are important for different vegetation types. In conclusion, spectral diversity is a potentially powerful tool for biodiversity assessment, but it requires a context-specific approach.