The rainforests of the Amazon basin are being cut by humans at a rate >20,000 km2/year leading to smaller and more isolated patches of forest, with remaining fragments often in the range of 1-100 ha. We analyzed samples of understory birds collected over 20 years from a standardized mist-netting program in 1- to 100-ha rainforest fragments in a dynamic Amazonian landscape near Manaus, Brazil. Across bird guilds, the condition of second growth immediately surrounding fragments was often as important as fragment size or local forest cover in explaining variation in abundance. Some fragments surrounded by 100 m of open pasture showed reductions in insectivorous bird abundance of over 95%, even in landscapes dominated by continuous forest and old second growth. These extreme reductions may be typical throughout Amazonia in small (< or =10 ha), isolated fragments of rainforest. Abundance for some guilds returned to preisolation levels in 10- and 100-ha fragments connected to continuous forest by 20-year-old second growth. Our results show that the consequences of Amazonian forest loss cannot be accurately described without explicit consideration of vegetation dynamics in matrix habitat. Any dichotomous classification of the landscape into 'forest" and "nonforest" misses essential information about the matrix.