Environmental variance can be decomposed into two components: the contrast among patches in the optimal phenotype and the variance in productivity among patches. Both components can influence the outcome of selection in heterogeneous environments. In general genetic diversity within a population should increase as the contrast among patches increases. As the variance in productivity increases, on the other hand, individual niche breadth should decrease since the response to selection becomes dominated by adaptation to the most productive patch. We tested this interpretation of diversity in heterogeneous environments by selecting the bacterium Pseudomonas fluorescens over several hundred generations in pair-wise mixtures of four carbon substrates. We then assessed the response to selection in the mixtures in terms of performance on each component substrate. The results provide general support for this interpretation of the environmental variance and suggest further that competition among genotypes promotes diversification in heterogeneous environments.