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Low-density rural home development is the fastest-growing form of land use in the United States since 1950. This “exurban” development (∼6–25 homes/km2) includes urban fringe development (UFD) on the periphery of cities and rural residential development (RRD) in rural areas attractive in natural amenities. This paper synthesizes current knowledge on the effects of UFD and RRD. We present two case studies and examine the patterns of biodiversity response and the ecological mechanisms that may underlie these responses. We found that many native species have reduced survival and reproduction near homes, and native species richness often drops with increased exurban densities. Exotic species, some human-adapted native species, and species from early successional stages often increase with exurban development. These relationships are sometimes nonlinear, with sharp thresholds in biodiversity response. These effects may be manifest for several decades following exurban development, so that biodiversity is likely still responding to the wave of exurban expansion that has occurred since 1950. The location of exurban development is often nonrandom relative to biodiversity because both are influenced by biophysical factors. Consequently, the effects on biodiversity may be disproportionately large relative to the area of exurban development. RRD is more likely than UFD to occur near public lands; hence it may have a larger influence on nature reserves and wilderness species. The ecological mechanisms that may underlie these responses involve alteration of habitat, ecological processes, biotic interactions, and increased human disturbance. Research on the patterns and mechanisms of biodiversity remains underdeveloped, and comparative and experimental studies are needed. Knowledge resulting from such studies will increase our ability to understand, manage, and mitigate negative impacts on biodiversity.