Several questions about functional programming languages have got me thinking about whether XSLT is a functional programming language. If not, what features are missing? Has XSLT 2.0 shortened or closed the gap?
XSLT is declarative as opposed to stateful.
Although XSLT is based on functional programming ideas, it is not a full functional programming language, it lacks the ability to treat functions as a first class data type. It has elements like lazy evaluation to reduce unneeded evaluation and also the absence of explicit loops.
Like a functional language though, I would think that it can be nicely parallelized with automatic safe multi threading across several processors.
From Wikipedia on XSLT:
As a language, XSLT is influenced by functional languages, and by text-based pattern matching languages like SNOBOL and awk. Its most direct predecessor was DSSSL, a language that performed the same function for SGML that XSLT performs for XML. XSLT can also be considered as a template processor.
Here is a great site on using XSLT as a functional language with the help of FXSL. FXSL is a library that implements support for higher-order functions.
Because of FXSL I don't think that XSLT has a need to be fully functional itself. Perhaps FXSL will be included as a W3C standard in the future, but I have no evidence of this.