Most fragmentation research focuses on the effects of carving up old‐growth forests, but less is known about influences of habitat fragmentation on secondary succession in patches of regenerating forests. Working with forest dynamics on islands in a vast lake created by a hydroelectric dam in China (the Thousand Island Lake), we sampled 29 islands that were cleared of forest during dam construction in 1959 and then underwent succession. Measurements taken in 2009–2010 and 2014–2015 evaluated community assembly during succession, based on species diversity, functional traits and structural properties. Forests on small islands remained at relatively early stages of compositional succession: species richness was low, and communities were dominated by early‐successional species, with few animal‐dispersed and shade‐tolerant plants. However, these islands had accumulated similar above‐ground biomass density to that on larger islands, mostly in the stems of a fast‐growing pine species. Island size was the key driver of secondary succession in regenerating forest fragments, while isolation had comparatively little effect. Edge effects were important for species composition and functional composition. Synthesis. Habitat fragmentation resulting from the creation of an artificial lake affected community assembly, with fewer late‐successional species on smaller islands. Maintenance of large fragments is critical for the rapid succession of forests. Paradigms on habitat fragmentation effects drawn from old‐growth forest studies are unlikely to hold in regenerating forest fragments. Restoration activities should consider landscape patterns to accelerate secondary succession of regenerating forests.