Though species interactions across local environmental gradients are well studied, the way in which species interactions shift between different habitats on a landscape scale has received less attention. We hypothesised that interactions among a suite of shoreline plant species shift across a hydrodynamic-exposure gradient, leading to generation of apparently distinct habitat types (e.g. bare cobble beaches, vegetated cobble beaches, fringing marshes and salt marshes). We examined hydrodynamic forcing and found that it was strongly correlated with shoreline habitat type. A transplant experiment revealed that all plants were rapidly crushed and abraded in bare cobble areas with high hydrodynamic energy and were out-competed by grasses in the low-energy salt marshes. Vegetated cobble beaches are inhabited by the largest amount of plant species under intermediate conditions, where hydrodynamic energy is sufficiently low to allow the establishment of the ecosystem engineer Spartina and sufficiently high to prevent the monopolisation of space by competitively dominant, but stress intolerant grasses. Experimentally reducing physical and biotic stresses (hydrodynamics and interspecific competition) on bare cobble beaches and salt marshes, respectively, enabled forbs to persist across the whole gradient. These results demonstrate that the outcome of interspecific interactions at landscape scales is driven by background physical conditions, and that this can result in the development of what are considered distinct habitats.