Summary1. We used observational and experimental field studies together with an individual‐based simulation model to demonstrate that behaviours of mottled sculpin (Cottus bairdi) were broadly consistent with the expectations of Giving‐Up Density theory and an Ideal Pre‐emptive Distribution habitat selection model.2. Specifically we found that: (i) adult mottled sculpin established territories within patches characterised by significantly higher prey densities and prey renewal rates than patches occupied by juveniles or randomly selected patches; (ii) patches abandoned by adult sculpin possessed significantly lower prey densities than newly occupied patches, although this was not true for juveniles; (iii) the observed giving‐up density (GUD) for adult sculpin (i.e. average prey density in patches recently abandoned) increased linearly with increasing fish size up to the average prey density measured in randomly selected patches (i.e. 350 prey items per 0.1 m2) and decreased with increasing sculpin density and (iv) juveniles rapidly shifted their distribution towards the highest quality patches following removal of competitively dominant adult sculpin.3. These results provide the first evidence of the applicability of GUD theory to a stream‐dwelling organism, and they elucidate the underlying factors influencing juvenile and adult sculpin habitat selection and movement behaviours. Furthermore, optimal patch use, ideal pre‐emptive habitat selection and juvenile ‘floating’ provide behavioural mechanisms linking environmental heterogeneity in the stream benthos to density‐dependent regulation of mottled sculpin populations in this system.