Mixed-species forests can have higher productivity, in terms of wood volume, than monospecific forests. In addition, higher tree species richness has been found to positively correlate with multiple ecosystem services and functions. Surprisingly, stem quality as one of the most important factors regarding the economic value of forests has rarely been formally studied in diverse forests. This paper aims at investigating how tree species richness influences stem quality and which factors may drive quality development in these stands. Stem quality, understood here essentially as the suitability of a particular stem for particular end-uses, is influenced by a tree's ability to capture sufficient resources for growth and is influenced by neighbouring trees, e.g. through shading and physical crown interactions. We collected data on crown size, stem form and tree health for over 12,000 trees in 209 study plots in six European regions (Finland, Germany, Poland, Romania, Italy and Spain) within naturally diverse forests to assess the impact of tree species richness on these characteristics. Results showed that quality variability between regions, stands and individual trees was high across species. At the stand level, there was a slight tendency towards lower stem quality with increasing diversity. However, individual trees of high quality were present at all diversity levels and for all target species. Tree species richness could not be confirmed as a primary influence on stem quality at the stand level. Rather, stand and individual tree properties such as structural composition, competition, tree size and crown characteristics were identified as the main factors for stem quality development, even in mixed stands. Many of the factors identified in this study can be directly or indirectly influenced by forest management strategies tailored to produce high-quality timber in mixed-species forests. Our findings suggest that diverse stands are not inferior regarding stem quality, while at the same time being able to provide various other ecosystem services.