Recent publications indicate that inter-specific interactions between soil bacteria may strongly affect the behavior of the strains involved, e.g., by increased production of antibiotics or extracellular enzymes. This may point at an enhanced competitive ability due to inter-specific triggering of gene expression. However, it is not known if such inter-specific interactions also occur during competition for carbon which is the normal situation in soil. Here, we report on competitive interactions between two taxonomically non-related bacterial strains, Pseudomonas sp. A21 and Pedobacter sp. V48, that were isolated from a dune soil. The strains showed strong effects on each other’s behavior and gene expression patterns when growing together under carbon-limited conditions on agar. The most pronounced observed visual changes in mixed cultures as compared to monocultures were (1) strong inhibition of a bioindicator fungus, suggesting the production of a broad-spectrum antibiotic, and (2) the occurrence of gliding-like movement of Pedobacter cells. Two independent techniques, namely random arbitrary primed-PCR (RAP-PCR) and suppressive subtractive hybridization (SSH), identified in total 24 genes that had higher expression in mixed cultures compared to monocultures. Microbial interactions were clearly bidirectional, as differentially expressed genes were detected for both bacteria in mixed cultures. Sequence analysis of the differentially expressed genes indicated that several of them were most related to genes involved in motility and chemotaxis, secondary metabolite production and two-component signal transduction systems. The gene expression patterns suggest an interference competition strategy by the Pseudomonas strain and an escape/explorative strategy by the Pedobacter strain during confrontation with each other. Our results show that the bacterial strains can distinguish between intra- and inter-specific carbon competition.