Legislation for the preservation of biodiversity has been instrumental to the recovery of multiple species and habitats. The European Habitats Directive 92/43/EEC is one of the strongest legal tools in nature conservation. This Directive seeks to achieve its biodiversity goals by requiring EU Member States to take measures to reach or maintain favorable conservation status (FCS) of natural habitats and species in Europe. FCS is a legal concept, but must be understood and applied by scientists, managers, and policy makers, and therefore a proper interpretation of this concept is crucial for biodiversity conservation and wildlife management. However, its definition contains several aspects that can lead to misinterpretation, forming the core of controversies in determining whether or not populations have reached FCS. In this review, we provide legal and ecological clarifications of the most contested aspects of FCS that have not yet been conclusively settled by analyzing and weighing a variety of sources.