The role of ecological factors in promoting morphological diversity within and among species is an area of debate among evolutionary biologists. Using morphological differences between sympatric species as evidence that competition promotes divergence (e.g., character displacement), has, in particular, drawn harsh criticism because morphological differences may have evolved during allopatry. In contrast to species, alternative phenotypes within a species have a common phylogenetic history, so differences between phenotypes are likely to result from ecological conditions experienced in sympatry. Using cannibal and typical larval phenotypes of the Arizona tiger salamander, Ambystoma tigrinum nebulosum, we tested two predictions of the hypothesis that resource competition promotes morphological divergence: (1) larval phenotypes should reduce competition by using different resources; and (2) the advantage to developing the alternative, cannibal phenotype should be highest when competition among typical larvae is most intense. We used field surveys and a field experiment to test these predictions. The two larval phenotypes used different resources, especially when competition was intense. The advantage to individual larvae of becoming cannibals was highest when competition for resources among typical larvae was high. These results support the hypothesis that resource competition can promote morphological divergence.