The tropical intertidal hermit crabs Clibanarius taeniatus and Clibanarius virescens were examined for differences in survival and physiological responses in low salinity. We found that C. taeniatus survived better in dilute seawater than C. virescens and that these species did not differ in their abilities to regulate haemolymph osmolarity, ionic concentration of the haemolymph or body fluid volume. We also found no difference in oxygen consumption between the species when acutely exposed to a range of temperature and salinity combinations. It is concluded that the greater survival in dilute seawater by C. taeniatus compared to C. virescens is due to a greater tolerance of dilution of body fluids by C. taeniatus. Differences in tolerance to dilute seawater may influence the habitat preferences of these species within the same geographical area.