Recent theory suggests that scale-dependent interaction between facilitation and competition can generate spatial structure in ecological communities. The application of this hypothesis, however, has been limited to systems with little underlying heterogeneity. We evaluated this prediction in a plant community along an intertidal stress gradient on cobble beaches in Rhode Island, USA. Prior studies have shown that Spartina alterniflora facilitates a forb-dominated community higher in the intertidal by modifying the shoreline environment. We tested the hypothesis that, at a smaller scale, Spartina competitively excludes forb species, explaining their marked absence within the lower Spartina zone. Transplant experiments showed forb species grow significantly better in the Spartina zone when neighbours were removed. Removal of the Spartina canopy led to a massive emergence of annual forbs, showing that competition limits local occupation. These findings indicate that interaction of large-scale facilitation and small-scale competition drives plant zonation on cobble beaches. This study is the first to provide empirical evidence of scale-dependent interactions between facilitation and competition spatially structuring communities in heterogeneous environments.