Losses of natural and semi-natural forests, mostly to agriculture, are a significant concern for biodiversity. Against this trend, the area of intensively managed plantation forests increases, and there is much debate about the implications for biodiversity. We provide a comprehensive review of the function of plantation forests as habitat compared with other land cover, examine the effects on biodiversity at the landscape scale, and synthesise context-specific effects of plantation forestry on biodiversity. Natural forests are usually more suitable as habitat for a wider range of native forest species than plantation forests but there is abundant evidence that plantation forests can provide valuable habitat, even for some threatened and endangered species, and may contribute to the conservation of biodiversity by various mechanisms. In landscapes where forest is the natural land cover, plantation forests may represent a low-contrast matrix, and afforestation of agricultural land can assist conservation by providing complementary forest habitat, buffering edge effects, and increasing connectivity. In contrast, conversion of natural forests and afforestation of natural non-forest land is detrimental. However, regional deforestation pressure for agricultural development may render plantation forestry a ‘lesser evil’ if forest managers protect indigenous vegetation remnants. We provide numerous context-specific examples and case studies to assist impact assessments of plantation forestry, and we offer a range of management recommendations. This paper also serves as an introduction and background paper to this special issue on the effects of plantation forests on biodiversity.