Summary1. Although populations harbour considerable diversity, most ecological studies still assume they are homogeneous. However, mounting evidence suggests that intraspecific diversity is not only common, but also important for interactions with community members. Here, intraspecific variation in Daphnia dentifera in haemoglobin content is shown to be a marker of hypolimnion use.2. Hypolimnion use differed substantially within and among D. dentifera populations. Daphnia dentifera with haemoglobin resided primarily in the hypolimnion, while D. dentifera lacking haemoglobin migrated vertically. These ‘deep’ and ‘migratory’D. dentifera had different seasonal phenologies and dynamics.3. Deep and migratory D. dentifera had qualitatively different relationships with an important competitor, Daphnia pulicaria. Deep D. dentifera density was negatively correlated with D. pulicaria density, whereas migratory density was not correlated with D. pulicaria density.4. Given that D. pulicaria tends to reside in the hypolimnion, this negative correlation probably reflects competition between D. pulicaria and the deep D. dentifera. This pattern would have been missed if only the relationship between the overall lake populations of D. dentifera and D. pulicaria had been studied.5. Abundances of deep D. dentifera and D. pulicaria were both correlated with the size of the hypolimnetic refuge from fish predation, but in opposite directions. Lakes with large refuges generally had high D. pulicaria and low deep D. dentifera densities.