New insights into community-level responses at the urban fringe, and the mechanisms underlying them, are needed. In our study, we investigated the compositional distinctiveness and variability of a breeding bird community at both sides of established edges between suburban residential areas and woodland reserves in Canberra, Australia. Our goals were to determine if: (1) community-level responses were direct (differed with distance from the edge, independent of vegetation) or indirect (differed in response to edge-related changes in vegetation), and (2) if guild-level responses provided the mechanism underpinning community-level responses. We found that suburbs and reserves supported significantly distinct bird communities. The suburban bird community, characterised by urban-adapted native and exotic species, had a weak direct edge response, with decreasing compositional variability with distance from the edge. In comparison, the reserve bird community, characterised by woodland-dependent species, was related to local tree and shrub cover. This was not an indirect response, however, as tree and shrub cover was not related to edge distance. We found that the relative richness of nesting, foraging and body size guilds also displayed similar edge responses, indicating that they underpinned the observed community-level responses. Our study illustrates how community-level responses provide valuable insights into how communities respond to differences in resources between two contrasting habitats. Further, the effects of the suburban matrix penetrate into reserves for greater distances than previously thought. Suburbs and adjacent reserves, however, provided important habitat resources for many native species and the conservation of these areas should not be discounted from continued management strategies.