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Aims: We asked how geological substrate affects the distribution of plant species between forest interiors, forest edges, and steppe patches in the forest–steppe landscapes. Specifically, we sought for the presence of the edge effect at the forest–grassland transitions on different substrates. Location: Austria, Czech Republic, Hungary, Slovakia and western Ukraine. Methods: We recorded the occurrence of vascular plant species in forest interiors, at forest edges and in steppe patches on 40 forest–steppe sites located on four substrates (andesite, dolomite, limestone and loess). We compared the distribution of species diversity, beta diversity (using multivariate analysis), the number of shared species between habitats and the estimation of vegetation biomass among forest‐steppe habitats on different substrates. Results: The edge effect was observed on hard rocks, while it was absent on loess, where the ecotone species richness was intermediate between that of forest and steppe. Loess sites also had the lowest species turnover between forest and steppe and the lowest number of edge specialists. Conclusions: Substrate has a strong effect on the formation of forest–steppe mosaics. It shapes the assembly rules and plant community diversity within individual habitat mosaics. Plant communities on each substrate can respond differently to changing climate. The strong assembly rules on hard rocks may be more likely to result in species loss than on loess or similar soft sediments, where a larger number of species find their optimum in more than one forest–steppe habitat. [ABSTRACT FROM AUTHOR]