Conversion of tropical and sub-tropical forest to plantation agriculture poses a significant threat to Madagascar’s unique biodiversity and ecosystem functioning, yet little research effort has been dedicated to studying its effects. By comparing avian diversity, community composition, and functional diversity metrics between secondary forest and plantation habitats in the Sambirano eco-region of Madagascar, this study simultaneously explored the impact of plantation establishment on forest communities and the conservation value of low-intensity, closed-canopy fruit plantations. Plantation habitats were found to maintain ecologically and functionally rich assemblages of birds. However, these assemblages were highly modified compared to the secondary forests and with significantly lower functional evenness. Closed-canopy plantations acted as a middle ground between open-canopy plantation and secondary forest. These results suggest that preservation of secondary forest will be essential to conservation efforts, but closed-canopy plantation may present a viable compromise between conservation and human development objectives.