We studied the effect of aquatic vegetation on the process of species sorting and community assembly of three functional groups of plankton organisms (phytoplankton, seston-feeding zooplankton, and substrate-dwelling zooplankton) along a primary productivity gradient. We performed an outdoor cattle tank experiment (n = 60) making an orthogonal combination of a primary productivity gradient (four nutrient addition levels: 0, 10, 100, and 1000 microg P/L; N/P ratio: 16) with a vegetation gradient (no macrophytes, artificial macrophytes, and real Elodea nuttallii). We used artificial plants to evaluate the mere effects of plant physical structure independently from other plant effects, such as competition for nutrients or allelopathy. The tanks were inoculated with species-rich mixtures of phytoplankton and zooplankton. Both productivity and macrophytes affected community structure and diversity of the three functional groups. Taxon richness declined with increasing plankton productivity in each functional group according to a nested subset pattern. We found no evidence for unimodal diversity-productivity relationships. The proportional abundance of Daphnia and of colonial Scenedesmus increased strongly with productivity. GLM analyses suggest that the decline in richness of seston feeders was due to competitive exclusion by Daphnia at high productivity. The decline in richness of phytoplankton was probably caused by high Daphnia grazing. However, partial analyses indicate that these explanations do not entirely explain the patterns. Possibly, environmental deterioration associated with high productivity (e.g., high pH) was also responsible for the observed richness decline. Macrophytes had positive effects on the taxon richness of all three functional plankton groups and interacted with the initial productivity gradient in determining their communities. Macrophytes affected the composition and diversity of the three functional groups both by their physical structure and through other mechanisms. Part of the macrophyte effect may be indirect via a reduction of phytoplankton production. Our results also indirectly suggest that the often reported unimodal relationship between primary productivity and diversity in nature may be partially mediated by the tendency of submerged macrophytes to be most abundant at intermediate productivity levels.