Fungal communities often form on ephemeral substrates and dispersal is critical for the persistence of fungi among the islands that form these metacommunities. Within each substrate, competition for space and resources is vital for the local persistence of fungi. The capacity to detect and respond by dispersal away from unfavorable conditions may confer higher fitness in fungi. Informed dispersal theory posits that organisms are predicted to detect information about their surroundings which may trigger a dispersal response. As such, we expect that fungi will increase allocation to dispersal in the presence of a strong competitor.In a laboratory setting, we tested how competition with other filamentous fungi affected the development of conidial pycnidiomata (asexual fruiting bodies) in Phacidium lacerum over 10 days. Phacidium lacerum was not observed to produce more asexual fruiting bodies or produce them earlier when experiencing interspecific competition with other filamentous fungi. However, we found that a trade‐off existed between growth rate and allocation to dispersal. We also observed a defensive response to specific interspecific competitors in the form of hyphal melanization of the colony which may have an impact on the growth rate and dispersal trade‐off.Our results suggest that P. lacerum have the capacity to detect and respond to competitors by changing their allocation to dispersal and growth. However, allocation to defence may come at a cost to growth and dispersal. Thus, it is likely that optimal life history allocation in fungi constrained to ephemeral resources will depend on the competitive strength of neighbors surrounding them.