Anemonefishes have long been known to cohabit host anemones in single-species groups assumed to be subject to intense intraspecific competition for resources. In the coral triangle where anemonefish diversity is highest, cohabitation of single anemones by two species has also been observed and recently viewed as a mechanism promoting co-existence. Mostly, however, interspecies differences in anemone use have been interpreted as a consequence of competitive exclusion and habitat partitioning. This chapter reviews the prevalence of intra- and interspecific cohabitation, and the roles of intra- and interspecific competition in explaining observed patterns within anemones and larger-scale population consequences. Intraspecific group size and the absolute and relative sizes of individuals in groups are tightly controlled by anemone size and intraspecific competition for social rank. Behavioural interactions restrict breeding to the dominant pair within anemones, and for many species, the larger-scale adult population density is controlled by the availability of anemones. Although interspecific cohabitation within anemones is common where anemonefish biodiversity is highest, it does appear to lead to interspecific competition, with only the dominant species able to successfully breed. The only exception is a pair of species that hybridize in a narrow geographic region of overlap. Despite 50 years of research, there remain few experimental manipulations of population densities and resource availability to fully understand the patterns and consequences of cohabitation and competition in anemonefishes.