Competing species may show positive correlations in abundance through time and space if they rely on a shared resource. Such positive correlations might obscure resource partitioning that facilitates competitor coexistence. Here, we examine the potential for resource partitioning between two ecologically similar midge species (Diptera: Chironomidae) in Lake Mývatn, Iceland. Tanytarsus gracilentus and Chironomus islandicus show large, roughly synchronized population fluctuations, implying potential reliance on a shared fluctuating resource and thereby posing the question of how these species coexist at high larval abundances. We first considered spatial partitioning of larvae. Abundances of both species were positively correlated in space; thus, spatial partitioning across different sites in the lake did not appear to be strong. We then inferred differences in dietary resources with stable carbon isotopes. T. gracilentus larvae had significantly higher δ13C values than C. islandicus, suggesting interspecific differences in resource use. Differences in resource selectivity, tube-building behavior, and feeding styles may facilitate resource partitioning between these species. Relative to surface sediments, T. gracilentus had higher δ13C values, suggesting that they selectively graze on 13C-enriched resources such as productive algae from the surface of their tubes. In contrast, C. islandicus had lower δ13C values than surface sediments, suggesting reliance on 13C-depleted resources that may include detrital organic matter and associated microbes that larvae selectively consume from the sediment surface or within their burrow walls. Overall, our study illustrates that coexisting and ecologically similar species may show positive correlations in space and time while using different resources at fine spatial scales.