How are bryophyte alpha and beta diversities distributed across spatial scales along an elevational gradient in an oceanic island? Which mechanisms and drivers operate to shape them? Starting from a multiscale hierarchical sampling approach along an 1000 m elevational transect, we used additive diversity partitioning and null modeling to evaluate the contributions of the alpha and beta diversity components to overall bryophyte diversity in Terceira Island, Azores. Substrate-level diversity patterns were explored by means of the Sørensen Similarity Index and the Lloyd Index of Patchiness. Elevation-level beta diversity was decomposed into its replacement and richness differences components, with several environmental variables being evaluated as diversity predictors. Bryophyte diversity proved to be primarily due to beta diversity between elevation sites, followed by diversity among substrates. Compositional differences between neighboring sites decreased with elevation, being mainly caused by species replacement and correlating with differences in relative humidity and disturbance. At the substrate level, we found a great homogeneity in terms of species composition, coupled with a low substrate specialization rate. We conclude that, in Terceira’s native vegetation patches, regional processes, such as environmental gradients associated with elevation, play a greater role in shaping bryophyte diversity than local processes. Moister and less disturbed areas at mid-high elevation harbor a richer bryoflora, consistently more similar and stable between neighbouring sites. Simultaneously, the different substrates available are somewhat ecologically redundant, supporting few specialized species, pointing to these areas providing optimal habitat conditions for bryophytes. Our findings provide a better understanding of how bryophyte diversity is generated in Terceira Island, indicating that management and conservation measures should focus on island-level approaches, aiming to protect and rehabilitate additional natural vegetation patches at different elevations, especially in the severely disturbed lowlands.