Riparian forests are crucial for biodiversity, but dam construction for hydroelectric power disrupts these ecosystems, causing habitat loss and altering river dynamics. Our study investigates the impacts of dams on tree diversity in the southern Brazilian Atlantic Forest. We sampled trees along riverbanks and uplands across 15 dam-affected fragments, analysing the relationship between habitat loss (i.e. loss of riparian zones by permanent flooding due to dam filling), elevation difference, fragment size, and dam implementation time with alpha and beta diversity using mixed models and redundancy analyses. Habitat loss had a more significant impact on beta diversity, leading to shifts in species composition and reduced uniqueness of communities as the impact’s intensity, spatial extent, and duration increased. Alpha diversity only increased in response to local elevation differences between plots located on uplands and riverbanks. Our sampling design can be applied to other inadequately monitored systems to provide insights into beta diversity, a component often neglected in dam licensing and mitigation processes. Our findings reveal a transient local heterogenisation, transitioning into regional homogenisation due to dam-induced habitat loss in riparian forests of the Brazilian Atlantic Forest.