Local adaptation in response to fine-scale spatial heterogeneity is well documented in terrestrial ecosystems. In contrast, in marine environments local adaptation has rarely been documented or rigorously explored. This may reflect real or anticipated effects of genetic homogenization, resulting from widespread dispersal in the sea. However, evolutionary theory predicts that for the many benthic species with complex life histories that include both sexual and asexual phases, each parental habitat patch should become dominated by the fittest and most competitive clones. In this study we used genotypic mapping to show that within headlands, clones of the sea anemone Actinia tenebrosa show restricted distributions to specific habitats despite the potential for more widespread dispersal. On these same shores we used reciprocal transplant experiments that revealed strikingly better performance of clones within their natal rather than foreign habitats as judged by survivorship, asexual fecundity, and growth. These findings highlight the importance of selection for fine-scale environmental adaptation in marine taxa and imply that the genotypic structure of populations reflects extensive periods of interclonal competition and site-specific selection.