Species diversity shapes ecosystem services. Despite the advantages that this relationship has for pest management, few studies have investigated the links between infrastructure damage (i.e. the percentage amount of infrastructures infested by termites), species richness and the environment. Moreover, it is not clear that which proportion of species richness (total/functional‐dominant/common/rare) contributes most to infrastructure damage. We correlated termite species richness with termite infestation throughout 83 cities in Zhejiang Province, eastern China. Species were classified according to whether or not they fed on wood, and based upon their distributional range, whether they were common or rare. We analysed the relative importance and the direct/indirect effects of climate, vegetation, anthropogenic activities, and the species richness of four functional categories of termites on the damage levels of eight infrastructure types in populated (i.e. urban and rural building, green space and sea wall) and remote areas (i.e. ancient building, large‐old tree, agroforest and reservoir dam). Common species favoured populated areas, whereas rare species favoured remote areas. Common species, with preferences for deciduous vegetation, caused more damage to the infrastructures of populated areas. Rare species, with preferences for evergreen vegetation, caused more damage in remote areas. Reforestation project which emphasized evergreen trees increased the number of rare species but reduced the number of common species. Elevation and drought risk were positively correlated with rare species richness but neutrally with common species richness. Structural equation models showed that vegetation predominantly influenced infrastructure damage in populated areas via altering common species richness, whereas climate predominantly and directly influenced infrastructure damage in remote areas. Notably, elevation and drought risk were positively correlated with infrastructure damage especially in remote areas. Synthesis and applications. Termites cause global economic losses of 15–40 billion dollars per year. Our study reveals that managing city forests and green space, for example increasing the proportion of evergreen trees, is a sustainable means of suppressing common termites and thereby reducing infrastructure damage in populated areas. Conservation strategies, supported by regular inspections, will become increasingly important as climate change not only threatens the survival of less harmful rare species, but also increases infrastructure damage in remote areas.