Habitat boundaries in general and forest edges in particular belong to the central issues in ecology. Theories about community and environmental edge-responses are diverse, but there is a lack of sufficient supporting field evidence: no consensus exists about distinctness and diversity of edges, and the existence of edge-related species. Moreover, as most studies focus on man-made edges, natural forest edges are less understood. We studied xeric forest edges in a wooded-steppe area. Twelve forest patches were selected, and plots were set up within the edges, the forest interiors and the grasslands. Species composition, species richness and Shannon diversity were compared between the three habitat types as well as between differently oriented edges. We identified diagnostic species for all habitats. Local habitat preferences of the edge-related species were compared to their regional preferences. Environmental factors of the different habitats were assessed by using ecological indicator values. Forest edges differed both from forest interiors and grasslands, forming a narrow but distinct habitat type between them. Species composition of the edges was not simply a mixture of forest and grassland species, but there were several edge-related species, most of which are regionally regarded as typical of closed steppe grasslands. Neither shady conditions of the forests, nor dry conditions of the grasslands are tolerated by these species; this is why they are confined to edges. Species richness and Shannon-diversity were higher within edges than in either of the habitat interiors. Ecological indicator values suggested that light intensity and temperature were higher in the edges than in the forests, but were lower than in the grasslands. In contrast, soil moisture was lower in the edges than in the forests but was higher than in the grasslands. There were slight differences between differently exposed edges concerning species composition, species richness and Shannon diversity. We conclude that edges should be considered an integral part of wooded-steppes. Their high diversity may have nature conservation implications. Our study emphasizes that edge species may be confined to edges only locally, but may have a broader distributional range in other areas. These species may be referred to as local edge species. Our results also point out that the very same edge can be interactive and non-interactive at the same time, depending on the characteristics considered.