The atmospheric boundary layer adjustment at the abrupt transition from a canopy (forest) to a flat surface (land or water) is investigated in a wind tunnel experiment. Detailed measurements examining the effect of canopy turbulence on flow separation, reduced surface shear stress andwake recovery are compared to data for the classical case of a solid backward-facing step. Results provide new insights into the interpretation for flux estimation by eddy-covariance and flux gradient methods and for the assessment of surface boundary conditions in turbulence models of the atmospheric boundary layer in complex landscapes and over water bodies affected by canopy wakes. The wind tunnel results indicate that the wake of a forest canopy strongly affects surface momentum flux within a distance of 35-100 times the step or canopy height, and mean turbulence quantities require distances of at least 100 times the canopy height to adjust to the new surface. The near-surface mixing length in the wake exhibits characteristic length scales of canopy flows at the canopy edge, of the flow separation in the near wake and adjusts to surface layer scaling in the far wake. Components of the momentum budget are examined individually to determine the impact of the canopy wake. The results demonstrate why a constant flux layer does not form until far downwind in the wake. An empirical model for surface shear stress distribution from a forest canopy to a clearing or lake is proposed.