The habitat amount hypothesis (HAH) stresses the importance of total patch amount over the size of individual patches in determining species richness within a local landscape. However, the absence of some species from patches too small to contain a territory would be inconsistent with the HAH. Using the association of territory size with body size and the circle as optimal territory shape, we tested several HAH predictions of threshold patch occupancy and richness of 19 guilds of primarily insectivorous breeding birds. We characterized 16 guild-associated patch types at high spatial resolution and assigned one type to each guild. We measured functional patch size as the largest circle that fit within each patch type occurring in a local landscape. Functional patch size was the sole or primary predictor in regression models of species richness for 15 of the 19 guilds. Total patch amount was the sole or primary variable in only 2 models. Quantifying patch size at high resolution also demonstrated that breeding birds should be absent from patches that are too small to contain a territory and larger species should occur only in larger patches. Functional patch size is a readily interpretable metric that helps explain the habitat basis for differences in species composition and richness between areas. It provides a tool to assess the combined effects of patch size, shape and perforation on threshold habitat availability, and with total patch amount can inform design and/or evaluation of conservation, restoration or enhancement options for focal taxa or biodiversity in general.