Abstract Mega‐dams create highly fragmented archipelagos, affecting biodiversity and ecosystem functioning in remnant forest isolates. This study assessed the long‐term impact of dam‐induced fragmentation on insular tropical tree communities, with the aim of generating robust recommendations to mitigate some of the detrimental biodiversity impacts associated with future dam development. We inventoried adult and sapling trees across 89 permanent plots, located on 36 islands and in three mainland continuous forest sites in the Balbina Dam, Brazilian Amazon. We examined differences in recruitment, structure, and composition of sapling and adult tree communities, in relation to plot‐, patch‐ and landscape‐scale attributes including area, isolation, and fire severity. Islands harboured significantly lower sapling (mean ± 95% CI 48.6 ± 3.8) and adult (5 ± 0.2) tree densities per 0.01 ha, than nearby mainland continuous forest (saplings, 65.7 ± 7.5; adults, 5.6 ± 0.3). Insular sapling and adult tree communities were more dissimilar than in mainland sites, and species compositions showed a directional shift away from mainland forests, induced by fire severity, island area, and isolation. Insular sapling recruitment declined with increasing fire severity; tree communities with higher community‐weighted mean wood density showed the greatest recruitment declines. Our results suggest that insular tree communities are unstable, with rare species becoming extinction‐prone due to reduced tree recruitment and density on islands, potentially leading to future losses in biodiversity and ecosystem functioning across Balbina's >3,500 reservoir islands. Policy implications. In Balbina, fire and reduced habitat area and connectivity were drivers of tree community decay after only 28 years of insularization, despite strict protection provided by the ~940,000 ha Uatumã Biological Reserve. Given that many dams are planned for lowland, moderately undulating Amazonia, we recommend that dam development strategy explicitly considers (a) dam location, aiming to minimize creation of small (<10 ha) and isolated islands, (b) maintaining reservoir water levels during droughts to reduce fire risk, and (c) including aggregate island area in environmental impact and offset calculations. Ideally, we recommend that alternatives to hydropower be sought in lowland tropical regions, due to the far‐reaching biodiversity losses and ecosystem disruption caused by river impoundment.
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