Abstract Aim The aim of this paper is to evaluate the combined effects of geographical distance and environmental distance on patterns of species similarity (similarity in species composition between sites), and to identify factors affecting the rate of decay in species similarity with each type of distance. Location Israel. Methods Data on species composition of land snails and land birds were recorded in 27 sites of 1 × 1 km scattered across a rainfall gradient in Israel. Matrices of similarity in species composition between all pairs of sites were computed and analysed with respect to corresponding matrices of geographical distance and rainfall distance (defined as the difference in mean annual rainfall between sites, and used as a measure of environmental distance). Mantel tests were applied to determine the correlation between species similarity and each type of distance. Factors affecting the decay in species similarity were investigated by comparing different subsets of the data using randomization tests. Results Both rainfall distance and geographical distance had negative effects on species similarity. The effect of rainfall distance was statistically significant even after controlling for differences in geographical distance, and vice versa. The per-unit effect of rainfall distance on species similarity decreased with increasing geographical distance, indicating that the two types of distances interacted in determining the similarity in species composition. Snails showed a higher rate of decay in species similarity with geographical distance than birds, and large snails showed a higher rate of decay than small snails, which are better passive dispersers. The per-unit effects of both rainfall distance and geographical distance on species similarity were higher in the desert region than in the Mediterranean region. Analyses focusing on a grain size of 10 × 10 m showed a lower similarity in species composition and a lower rate of decay in species similarity with rainfall distance than analyses carried out at a grain size of 1 × 1 km. Main conclusions Patterns of similarity in species composition are influenced by the combined effects of environmental variation, the position of the area along environmental gradients, the dispersal properties of the component species, and the scale (both spatial extent and grain size) at which the patterns are examined.