Habitat loss has pervasive and disruptive impacts on biodiversity in habitat remnants. The magnitude of the ecological impacts of habitat loss can be exacerbated by the spatial arrangement -- or fragmentation -- of remaining habitat. Fragmentation per se is a landscape-level phenomenon in which species that survive in habitat remnants are confronted with a modified environment of reduced area, increased isolation and novel ecological boundaries. The implications of this for individual organisms are many and varied, because species with differing life history strategies are differentially affected by habitat fragmentation. Here, we review the extensive literature on species responses to habitat fragmentation, and detail the numerous ways in which confounding factors have either masked the detection, or prevented the manifestation, of predicted fragmentation effects. Large numbers of empirical studies continue to document changes in species richness with decreasing habitat area, with positive, negative and no relationships regularly reported. The debate surrounding such widely contrasting results is beginning to be resolved by findings that the expected positive species-area relationship can be masked by matrix-derived spatial subsidies of resources to fragment-dwelling species and by the invasion of matrix-dwelling species into habitat edges. Significant advances have been made recently in our understanding of how species interactions are altered at habitat edges as a result of these changes. Interestingly, changes in biotic and abiotic parameters at edges also make ecological processes more variable than in habitat interiors. Individuals are more likely to encounter habitat edges in fragments with convoluted shapes, leading to increased turnover and variability in population size than in fragments that are compact in shape. Habitat isolation in both space and time disrupts species distribution patterns, with consequent effects on metapopulation dynamics and the genetic structure of fragment-dwelling populations. Again, the matrix habitat is a strong determinant of fragmentation effects within remnants because of its role in regulating dispersal and dispersal-related mortality, the provision of spatial subsidies and the potential mediation of edge-related microclimatic gradients. We show that confounding factors can mask many fragmentation effects. For instance, there are multiple ways in which species traits like trophic level, dispersal ability and degree of habitat specialisation influence species-level responses. The temporal scale of investigation may have a strong influence on the results of a study, with short-term crowding effects eventually giving way to long-term extinction debts. Moreover, many fragmentation effects like changes in genetic, morphological or behavioural traits of species require time to appear. By contrast, synergistic interactions of fragmentation with climate change, human-altered disturbance regimes, species interactions and other drivers of population decline may magnify the impacts of fragmentation. To conclude, we emphasise that anthropogenic fragmentation is a recent phenomenon in evolutionary time and suggest that the final, long-term impacts of habitat fragmentation may not yet have shown themselves.