Tropical forests worldwide are being fragmented at a rapid rate, causing a tremendous loss of biodiversity. Determining the impacts of forest disturbance and fragmentation on tropical biotas is therefore a central goal of conservation biology. We focused on bird communities in the interior (>100 m from forest edge) of forest fragments (300, 600, and 1200 ha) in the lowlands of Papua New Guinea and compared them with those in continuous forest. We surveyed bird communities using point counts, mist‐netting, and random walks, and measured habitat and microclimate characteristics at each site. We also surveyed leaf‐dwelling arthropods, butterflies, and ants, and obtained diet samples from birds to examine food availability and food preferences. We recorded significantly fewer bird species per point in the 300‐ha forest fragment than in other study sites. Overall, we recorded 80, 84, and 88 species, respectively, in forest fragments, and 102 in continuous forest. Frugivores (especially large frugivores) and insectivores had lower species richness in forest fragments than continuous forest. Our results did not support the food scarcity hypothesis, that is, the decline of insectivorous birds in forest fragments is caused by an impoverished invertebrate prey base. We also found no significant differences among forest fragments and continuous forest in microclimates of forest interiors. Rather, we found that microhabitats preferred by sensitive birds (i.e., 30% of species with the strongest preferences for continuous forest) were less common in forest fragments (19%–31% of points) than in continuous forest (86% of points). Our results suggest that changes in microhabitats may make forest fragments unsuitable for sensitive species. However, limited dispersal capabilities could also make some species of birds less likely to disperse and occupy fragments. In addition, impoverished food resources, size of the forest fragment, or hunting pressure could contribute to the absence of large frugivorous birds in forest fragments. The forest fragments in our study, preserved as village‐based protected areas, were not large enough to sustain the bird communities found in continuous forest. However, because these fragments still contained numerous bird species, preservation of such areas can be an important component of management strategies to conserve rainforests and birds in Papua New Guinea.