We were interested in the role of arbuscular mycorrhiza (AM) in the competition between plants of different sizes. A pot experiment of factorial design was established, in which AM root colonization and competition were used as treatments. Five-week-old Prunella vulgaris seedlings were chosen as target plants (i.e. plants whose response to competition was studied) and the following (13 replicates of each) were used as neighbours: (1) a large, 10-week-old P. vulgaris, (2) two P. vulgaris seedlings, and (3) a large, 10-week-old Fragaria vesca. In the experiment where small neighbours were grown together with small target plants, competition did not reduce target plant weight significantly, compared to the other two treatments. The competitive effects of large neighbours were significant, regardless of species (both older neighbours reduced the weights of target plants similarly), but there was a clear difference between intra- and interspecific competition when plants were mycorrhizal. In intraspecific competition with a large neighbour, the target plant shoot weight was reduced 24% when inoculated with AM. Thus, AM amplified rather than balanced intraspecific competition. In interspecific competition with old F. vesca, the shoot weights of target plants were 22% greater when inoculated with AM than when non-mycorrhizal. The results showed that, for given soil condition, AM might increase species diversity by increasing competitive intraspecific suppression and decreasing the interspecific suppression of small plants by larger neighbours.