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AIM: Deterministic niche theory predicts that increasing environmental heterogeneity increases species richness. In contrast, a recent stochastic model suggests that heterogeneity has a unimodal effect on species richness since high levels of heterogeneity reduce the effective area available per species, thereby increasing the likelihood of stochastic extinction (the ‘area–heterogeneity trade‐off’). We tested these contrasting predictions using data on bird distributions in North America. LOCATION: North America. METHODS: The effect of heterogeneity on species richness was tested using simultaneous autoregressive regression models based on two measures of heterogeneity (elevational range and land‐cover richness) each quantified at two scales (400 m, 5 km), three measures of species richness (observed, corrected for incomplete detection, and corrected for regional richness) and three variable selection methods [forced entry, Akaike information criterion (AIC)‐based and a null‐model approach]. Covariates included precipitation, temperature, elevation and latitude. For all variables, both linear and quadratic terms were included in the analyses. RESULTS: Overall, heterogeneity had a weak effect on species richness and the contribution of the quadratic term of heterogeneity to the explained variance was very small ( 10), and in 22 of those 30 models the null hypothesis of a monotonically positive relationship could be rejected at the 0.05% significance level. MAIN CONCLUSIONS: Patterns of bird richness in North America were predominantly consistent with the predictions of the area–heterogeneity trade‐off. Future attempts to understand the mechanisms affecting species diversity should pay more attention to the potential consequences of this fundamental trade‐off.