Genetic variation and environmental heterogeneity fundamentally shape the interactions between plants of the same species. According to the resource partitioning hypothesis, competition between neighbors intensifies as their similarity increases. Such competition may change in response to increasing supplies of limiting resources. We tested the resource partitioning hypothesis in stands of genetically identical (clone-origin) and genetically diverse (seed-origin) Eucalyptus trees with different water and nutrient supplies, using individual-based tree growth models. We found that genetic variation greatly reduced competitive interactions between neighboring trees, supporting the resource partitioning hypothesis. The importance of genetic variation for Eucalyptus growth patterns depended strongly on local stand structure and focal tree size. This suggests that spatial and temporal variation in the strength of species interactions leads to reversals in the growth rank of seed-origin and clone-origin trees. This study is one of the first to experimentally test the resource partitioning hypothesis for intergenotypic vs. intragenotypic interactions in trees. We provide evidence that variation at the level of genes, and not just species, is functionally important for driving individual and community-level processes in forested ecosystems.