Coexistence among species with different competitive abilities and shared, limited resources has long been a focus of ecologists. Intraspecific spatial aggregation has been identified as one possible mechanism promoting coexistence in a variety of systems. It is hypothesized that when competitors are aggregated there are fewer interspecific encounters for weak competitors and increased competition among adjacent strong competitors. I addressed this coexistence hypothesis in coral reef communities which are often diverse, highly competitive, and resource-limited. I used two common species of scleractinian corals to test whether within-patch aggregation of a strong coral competitor enhances the growth and competitive success of a weaker coral competitor. Corals grown in aggregated arrangements, where the number and type of competitors were held constant, grew almost twice as much as those in non-aggregated arrangements. These growth results suggest that coexistence is promoted by aggregation within competitive neighborhoods. Using a simulation model, I found that persistence of inferior competitors was increased when this aggregation benefit was applied at larger spatial and temporal scales. Further experiments underscored the importance of competition by revealing that the growth of weak competitors was inversely related to the number of adjacent competitors. In addition, there was weak evidence that the aggregation benefit is less important when competitive refuge is present. Spatial aggregation may be one of several important mechanisms contributing to species coexistence on coral reefs.