Spatial segregation of habitat use between species can facilitate coexistence, even at fine spatial scales. A prevailing view suggests that habitat segregation is produced by differential habitat preference by competing species. However, behavioral processes, such as density-dependent movement, can create similar distribution patterns without differential habitat preference by repelling one another from crowded areas. Nevertheless, little is known about how density-dependent movement processes may shape the spatial organization of community structure. We combined simulations and field observations to address this knowledge gap. We simulated density-dependent movement processes to study their consequences for the distributional overlap of competing species within a local habitat. We found that competing species would segregate their microhabitats when interspecific density-dependence in movement is far greater than intraspecific density-dependence. In support of this simulation, we observed consistent empirical patterns in six common fishes in streams in the Piedmont of North Carolina. The study species were often segregated from one another, and this pattern was consistent across four streams and seasons. Further, the analysis of habitat affinity suggested that the segregated distributions could not be explained by species-specific habitat preferences, thus pointing to density-dependence in movement as the primary driver in species segregation. Collectively, our findings point to density-dependent movement processes having an undeniable role in shaping community structure with possible consequences for species coexistence at local scales.