Terrestrial animals are negatively affected by habitat loss, which is assessed on a landscape scale, whereas secondary effects of habitat loss, such as crowding, are usually disregarded. Such impacts are inherently hard to address and poorly understood, and there is a growing concern that they could have dire consequences. We sampled birds throughout a deforestation process to assess crowding stress in an adjacent habitat remnant in the southern Brazilian Atlantic Forest. Crowding is expected of highly mobile taxa, especially given the microhabitat heterogeneity of Neotropical forests, and we hypothesized that the arrival of new individuals or species in refuges shifts assemblage patterns. We used point counts to obtain bird abundances in a before‐after‐control‐impact design sampling of a deforestation event. Temporal changes in taxonomic and functional diversity were examined with metrics used to assess alpha and beta diversity, turnover of taxonomic and functional similarity, and taxonomic and functional composition. Over time increased abundance of some species altered the Simpson index and affected the abundance‐distribution of traits in the habitat remnant. Taxonomic composition and functional composition changed in the remnant, and thus bird assemblages changed over time. Taxonomic and functional metrics indicated that fugitives affected resident assemblages in refuges, and effects endured >2 years after the deforestation processes had ceased. Dissimilarity of taxonomic composition between pre‐ and postdeforestation assemblages increased, whereas functional composition reverted to preimpact conditions. We found that ecological disruptions resulted from crowding and escalated into disruptions of species’ assemblages and potentially compromising ecosystem functioning. It is important to consider crowding effects of highly mobile taxa during impact assessments, especially in large‐scale infrastructure projects that may affect larger areas than is assumed.