Marine benthic environments are of two basic types: hard substrata and sediments. Organisms living in these habitats are morphologically and taxonomically diverse. Nevertheless, they can be subdivided into a limited number of functional groups according to the different ways they use and alter the substratum. Each functional group is polyphyletic and includes many trophic modes. Two groups, tube builders in sediments and sheet-like animals on hard substrata, are examined in detail. Factors most important in competition between members of different functional groups are often not the same as for competition between members of the same functional group. In both situations there is more evidence for competition between distantly related taxa than between closely related forms.