Interspecific competition in natural plant communities is highly dependent on nutrient availability. At high levels of nutrient availability, competition is mainly for light. As light is a unidirectional resource, high-nutrient habitats are dominated by fast-growing perennials with a tall stature and a rather uniform vertical distribution of leaf area. Moreover, these species have high turnover rates of leaves and roots and a high morphological plasticity during the differentiation of leaves. There is less consensus, however, about the importance and intensity of interspecific competition in nutrient-poor environments. It is argued that selection in nutrient-poor habitats is not necessarily on a high competitive ability for nutrients and a high growth rate, but rather on traits which reduce nutrient losses (low tissue nutrient concentrations, slow tissue turnover rates, high nutrient resorption efficiency). Due to evolutionary trade-offs plants can not maximize both growth rate and nutrient retention. Thus, the low growth rate of species from nutrient-poor habitats should be considered as the consequence of nutrient retention rather than as a feature on which direct selection takes place. The contrasting traits of species from nutrient-poor and nutrient-rich habitats mutually exclude them from each others' habitats. Moreover, these traits have severe consequences for litter decomposability and thereby also for nutrient cycling. This leads both in nutrient-poor and nutrient-rich habitats to a positive feedback between plant species dominance and nutrient availability, thereby promoting ecosystem stability.