niche differentiation is argued as one of the mechanisms explaining species coexistence. despite their sessile nature, similar resource needs and traits to acquire and utilize resources closely related plant species coexist. i hypothesized that i) spatial distribution of congeneric species would be similar because they are closely related with similar traits and resource needs and ii) each species will perform different biological functions (growth vs. reproduction) optimally at different points along a resource gradient and thereby differentiate their functional niche to ensure coexistence by complementary resource use. i collected data on two congeneric wild blueberry species, vaccinium angustifolium and v. myrtilloides on occurrence from 13,500 20 x 20 cm quadrates, their growth and reproductive response to light and microhabitat parameters from 360 1 x 1 m quadrates along 90 30 m transects from 5 regions of nw ontario. i also grew these two species in a common garden experiment (cge) under a shade gradient to test their response to light in competition-free environment. a chi-square test confirmed that v. angustifolium and v. myrtilloides are co-occurring species. variance partitioning analysis revealed that light is the most important microsite variable. frequency of occurrence showed their abundance gradually increase from low to high light with high niche overlaps. regression model fitting of cover (indicating growth) and berry yield (indicating reproduction) along the light gradient provided species functional response curves. by rescaling the response curves i obtained comparable functional fitness/performance curves, which showed that for both species optimum performance for growth and reproduction peaked at different light levels in natural habitats and in cge. but their niche overlaps between growth and reproduction functions were markedly lower in natural habitats than in cge meaning that these congeneric species differentiate their niche preferences for growth and reproduction. both species showed conspicuous shift of functional niche in natural habitats from the cge. higher growth of one species was often corresponded with lower growth of the other suggesting a complimentary use of finite growing space. these results suggest that neighbouring plants may reduce their competitive stress by adjusting their biological functions through functional niche differentiation. to my knowledge this is the first study providing clear quantitative evidence of functional niche differentiation in two closely related coexisting plants. one of the mechanisms by which clonal understory woody plants avoid competition for light is through differentiating ‘physical space niches’ by foraging small resource patches by clonal extension. the results of my study reveal another mechanism of species co-existence, which has evolutionary significance. i show how two congeneric clonal species occupying the same physical niche space can avoid competition by differentiating their functional niche. further discovery of functional niche differentiation in multiple coexisting species along multiple resource gradients (such as soil nutrients, soil moisture) will make a significant contribution to refining community assembly rules.