Changes in the distribution and abundance of bird and small mammal species at urban-wildland edges can be caused by different factors. Edges can affect populations directly if animals respond behaviorally to the edge itself or if proximity to edge directly affects demographic vital rates (an “ecotonal” effect). Alternatively, urban edges can indirectly affect populations if edges alter the characteristics of the adjacent wildland vegetation, which in turn prompts a response to the altered habitat (a “matrix” or “habitat” effect). We studied edge effects of birds and small mammals in southern Californian coastal sage scrub, and assessed whether edge effects were attributable to direct behavioral responses to edges or to animal responses to changes in habitat at edges. Vegetation species composition and structure varied with distance from edge, but the differences varied among study sites. Because vegetation characteristics were correlated with distance from edge, responses to habitat were explored by using independently-derived models of habitat associations to calibrate vegetation measurements to the habitat affinities of each animal species. Of sixteen species examined, five bird and one small mammal species responded to edge independently of habitat features, and thus habitat restoration at edges is expected to be an ineffective conservation measure for these species. Two additional species of birds and one small mammal responded to habitat gradients that coincided with distance from edge, such that the effect of edge on these species was expressed via potentially reversible habitat degradation.