Fragmentation is predicted to reduce biodiversity and stability by increasing habitat isolation and impeding dispersal among patches. These effects may manifest at both the interspecific and intraspecific levels, yet few studies have simultaneously explored dispersal effects across levels of organization. We used field mesocosm experiments to examine how habitat isolation (in the form of dispersal rate) alters inter- and intraspecific stability and diversity in local zooplankton communities. We observed effects of increasing dispersal rate at both the intra- and interspecific levels. Increasing dispersal increased local species diversity and reduced mean temporal variability of populations. At the intraspecific level, Daphnia pulex clonal diversity was enhanced by dispersal and mean temporal variability of clone abundances through time was reduced.