Mechanisms linked to demographic, biogeographic, and food-web processes thought to underpin community stability could be affected by habitat size, but the effects of habitat size on community stability remain relatively unknown. We investigated whether those habitat-size-dependent properties influenced community instability and vulnerability to perturbations caused by disturbance. This is particularly important given that human exploitation is contracting ecosystems, and abiotic perturbations are becoming more severe and frequent. We used a perturbation experiment in which 10 streams, spanning three orders of magnitude in habitat size, were subjected to simulated bed movement akin to a major flood disturbance event. We measured the resistance, resilience, and variability of basal resources, and population and community-level responses across the stream habitat-size gradient immediately before, and at 0.5, 5, 10, 20, and 40 d post-disturbance. Resistance to disturbance consistently increased with stream size in all response variables. In contrast, resilience was significantly higher in smaller streams for some response variables. However, this higher resilience of small ecosystems was insufficient to compensate for their lower resistance, and communities of smaller streams were thus more variable over time than those of larger streams. Compensatory dynamics of populations, especially for predators, stabilized some aspects of communities, but these mechanisms were unrelated to habitat size. Together, our results provide compelling evidence for the links between habitat size and community stability, and should motivate ecologists and managers to consider how changes in the size of habitats will alter the vulnerability of ecosystems to perturbations caused by environmental disturbance.