Large-scale deployment of biomass energy plantations has the potential to affect biodiversity (positively or negatively) through altered habitat quality, pesticide use, soil erosion, water quality or other factors. In this paper, effects on biodiversity through habitat change are discussed. Effects will depend in part on the land-use type that the plantation replaces. Studies on hybrid poplar plantations in the north-central United States suggest that replacement of agricultural croplands with energy tree plantations would have little if any negative effect on overall avian and mammalian abundance and diversity. Most birds and mammals occupying plantations are widespread, regionally abundant species with ample habitat. Within-plantation heterogeneity, an important determinant of animal use, could be incorporated into plantation design to enhance biodiversity. However, it is not clear whether this approach is compatible with cultural techniques used to grow energy crops. Varying the size or shape of plantations may be a strategy for manipulating animal use of plantations. In addition to habitat replacement per se, effects on biological organisms could occur through altered landscape-level patterns. These include 1) effects on organisms in adjacent habitats (via competition, predation, or nest parasitism) resulting from changes in abundance of some species on plantations; 2) possible fragmentation of open or shrubby habitats; 3) altered interactions among local populations as a result of the unique boundaries created by plantation establishment. Further research is needed on these and other issues to provide a basis for guiding the development of biomass energy plantations in an environmentally sound manner.