1.Islands formed upstream of mega hydroelectric dams are excellent experimental landscapes to assess the impacts of habitat fragmentation on biodiversity. We examined the effects of plot-, patch- and landscape-scale variables on the patterns of floristic diversity across 34 forest islands that had experienced 26 years of isolation since the creation of the 4,437 km2 Balbina Hydroelectric Reservoir of central Brazilian Amazonia. In addition, three undisturbed continuous forest sites in neighbouring mainland areas were also sampled across a comparable elevational gradient. 2.We identified all live trees ≥10 cm DBH at species level within a total of 87 quarter-hectare forest plots and conducted a comprehensive compilation of functional attributes of each tree species. We then examined species-area relationships (SARs) and the additional effects of patch and landscape scale metrics on patterns of tree assemblage heterogeneity, both in terms of taxonomic and functional diversity. 3.Despite a clearly positive SAR, edge-mediated forest disturbance was the single most important driver of species composition and abundance within islands. Our results suggest that non-random floristic transitions within island plots followed a predictable pattern, with different life-history traits either penalizing or rewarding local persistence of different functional groups. Distance to edges mediated the probability of tree mortality induced by windfalls and episodic surface fires, clearly resulting in faster species turnover and unidirectional changes in guild structure within small islands where light-wooded fast-growing pioneers largely replaced heavy-wooded species of the old-growth flora. 3.Synthesis ─ Following a simultaneous 26-year post-isolation history, we disentangle the effects of habitat loss and insularization on tree assemblages within a large set of Amazonian ‘true’ forest islands, of variable sizes, sharing a uniform open-water matrix. Area effects are expressed via a response to edge effects, with trees in smaller islands being more vulnerable to edge-related surface fires and windthrows. Additionally, forest edge effects can be a powerful driver of non-random floristic transitions across islands within the Balbina archipelago via a process of rapid pioneer proliferation, drastically affecting both the taxonomic and functional composition of insular tree communities. Finally, our results indicate that detrimental effects of forest fragmentation induced by hydroelectric dams are considerably stronger than those of forest patches embedded within a terrestrial vegetation matrix.