Past studies of local extinctions in fragmented habitats most often tested the influence of fragment size and isolation while ignoring how differences in the surrounding landscape matrix may govern extinction. We assessed how both the spatial attributes of remnant patches (area and isolation) and landscape factors (extent of urbanization and maximum inter-fire interval) influence the persistence of native plant species in grasslands in western Victoria, Australia. Persistence was determined in 2001 by resurveying 30 remnants first surveyed in the 1980s, and correlates of extinction were assessed using Bayesian logistic regression models. On average, 26% of populations of native species became locally extinct over two decades. Area and isolation had little effect on the probability of local extinction, but urbanization and longer maximum inter-fire intervals increased extinction risk. These findings suggest that the native grasslands studied are relatively insensitive to area- and isolation-based fragmentation effects and that short-term persistence of plant populations requires the maintenance of habitat quality. The latter is strongly influenced by the landscape matrix surrounding remnant patches through changes in fire regimes and increased exogenous disturbance.