Stepping-stone models for the ecological dynamics of metapopulations are often used to address general questions about the effects of spatial structure on the nature and complexity of population fluctuations. Such models describe an ensemble of local and spatially isolated habitat patches that are connected through dispersal. Reproduction and hence the dynamics in a given local population depend on the density of that local population, and a fraction of every local population disperses to neighboring patches. In such models, interesting dynamic phenomena, e.g. the persistence of locally unstable predator–prey interactions, are only observed if the local dynamics in an isolated patch exhibit non-equilibrium behavior. Therefore, the scope of these models is limited. Here we extend these models by making the biologically plausible assumption that reproductive success in a given local habitat not only depends on the density of the local population living in that habitat, but also on the densities of neighboring local populations. This would occur if competition for resources occurs between neighboring populations, e.g. due to foraging in neighboring habitats. With this assumption of quasi-local competition the dynamics of the model change completely. The main difference is that even if the dynamics of the local populations have a stable equilibrium in isolation, the spatially uniform equilibrium in which all local populations are at their carrying capacity becomes unstable if the strength of quasi-local competition reaches a critical level, which can be calculated analytically. In this case the metapopulation reaches a new stable state, which is, however, not spatially uniform anymore and instead results in an irregular spatial pattern of local population abundance. For large metapopulations, a huge number of different, spatially non-uniform equilibrium states coexist as attractors of the metapopulation dynamics, so that the final state of the system depends critically on the initial conditions. The existence of a large number of attractors has important consequences when environmental noise is introduced into the model. Then the metapopulation performs a random walk in the space of all attractors. This leads to large and complicated population fluctuations whose power spectrum obeys a red-shifted power law. Our theory reiterates the potential importance of spatial structure for ecological processes and proposes new mechanisms for the emergence of non-uniform spatial patterns of abundance and for the persistence of complicated temporal population fluctuations.