The key difference between functional group and substituent is that the functional group is an active part of a molecule whereas substituent is a chemical species that can replace an atom or a group of atoms in a molecule.
The terms functional group and substituent are often found in organic chemistry. A functional group is a specific type of substituent which causes the activity of a molecule. This means the reactions a certain molecule undergoes is determined by the functional group. However, a substituent can be either an active chemical species or an inactive chemical species.