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Urbanisation affects indigenous fauna in many ways; some species persist and even increase in urban areas, whereas others are lost. The causative mechanisms determining changes in distributions and community structure remain elusive. We investigated three hypothesized mechanisms, which influence success or failure of the insectivorous bat assemblage across the urban landscape of Sydney, Australia; landscape heterogeneity (diversity of land uses), productivity (as indexed by landscape geology) and trait diversity. We present data on species richness and activity (bat passes per night) collected systematically using ultrasonic bat detectors from randomly selected landscapes (each 25 km2). Landscapes were categorized into classes including ‘urban’, ‘suburban’ and ‘vegetated’, where suburban sites were additionally stratified based on geology, as a proxy for productivity. Four landscape elements were sampled within each landscape, including remnant bushland (>2 ha), riparian areas, open space/parkland and residential/built space. We found that there was significantly greater bat activity and more species of bat in areas on fertile shale geologies (p<0.05), supporting the productivity, rather than the heterogeneity hypothesis. Within landscapes, there was no significant effect of the landscape element sampled, although bushland and riparian sites recorded greater bat activity than open space or backyard sites. Using general linear mixed models we found bat activity and species richness were sensitive to landscape geology and increasing housing density at a landscape scale. Using an RLQ analysis a significant relationship was found between these variables and species traits in structuring the community present (p<0.01). Specifically, open-adapted bats were associated with areas of greater housing density, while clutter-adapted bats were uncommon in urban areas and more associated with greater amounts of bushland in the landscape. Overall we found greater support for the productivity and traits hypotheses, rather than the heterogeneity hypothesis. The degree of urbanisation and amount of bushland remaining, in combination with landscape geology, influenced bat activity and mediated the trait response. Our findings reflect global trends of species diversity and abundance in urban landscapes, suggesting that processes affecting bat species distribution in urban ecosystems may be predictable at a landscape scale.