Traits with close ties to fitness are central in understanding the process of adaptation and whether, and in what contexts, selection acts to erode genetically based phenotypic variation. The persistence and even predominance of apparently unfit genotypes in natural populations is particularly problematic. Genetically based growth form variation in the clonal hydrozoan genus Hydractinia epitomizes this problem. A rich literature exists in this model system, indicating that frequent and intense intraspecific competition occurs, primarily between juveniles, and ends in the elimination of subordinates. Despite this strong source of directional selection, extreme variation in competitive ability, mediated by early ontogenetic growth form, is known to exist in all species studied to date. While a genetic trade-off between size at first reproduction and competitive ability has been proposed and discussed in the literature, no published data address this or other explanations for the conspicuous morphological variation observed in natural populations. Here I show that (1) competitively inferior phenotypes are most abundant in 2 of 3 species found in the northwestern Atlantic and northern Gulf of Mexico, (2) shifts in the distribution of predominant growth forms among species reflect, at least in part, interspecific differences in the strength of selection imposed by intraspecific competition, (3) an intrinsic genetic trade-off with life history components or growth does not account for widely variable competitive abilities within species, but (4) superior competitors suffer greater costs in terms of survival and early growth in the context of dense hermit crab populations, suggesting that competitively inferior phenotypes are more physically robust and better withstand mechanical disturbance imposed by hermit crab interactions, and (5) evidence from natural populations on spatial structure and temporal variation is consistent with the hypothesis that environmental heterogeneity in symbiotic host density, as a result of host species and size variation, create spatial and temporal variability in disturbance regimes, favoring competitively dominant growth forms at low density and physically robust growth forms at high density.