Habitat quality and metapopulation effects are the main hypotheses that currently explain the disproportionate decline of insects in cultivated Holarctic landscapes. The former assumes a degradation in habitat quality for insects within surviving ecosystems, the latter that too few, small or isolated islands of ecosystem remain in landscapes for populations to persist. These hypotheses are often treated as alternatives, and this can lead to serious conflict in the interpretations of conservationists. We present the first empirical demonstration that habitat quality and site isolation are both important determinants of where populations persist in modern landscapes. We described the precise habitat requirements of Melitaea cinxia, Polyommatus bellargus and Thymelicus acteon, and quantified the variation in carrying capacity within each butterfly's niche. We then made detailed surveys to compare the distribution and density of every population of each species with the size, distance apart and quality of their specific habitats in all their potential habitat patches in three UK landscapes. In each case, within–site variation in habitat quality explained which patches supported a species' population two to three times better than site isolation. Site area and occupancy were not correlated in any species. Instead of representing alternative paradigms, habitat quality and spatial effects operate at different hierarchical levels within the same process: habitat quality is the missing third parameter in metapopulation dynamics, contributing more to species persistence, on the basis of these results, than site area or isolation. A reorientation in conservation priorities is recommended.