Though many processes are involved in determining which species coexist and assemble into communities, competition is among the best studied. One hypothesis about competition's contribution to community assembly is that more closely related species are less likely to coexist. Though empirical evidence for this hypothesis is mixed, it remains a common assumption in certain phylogenetic approaches for inferring the effects of environmental filtering and competitive exclusion. Here, we relate modern coexistence theory to phylogenetic community assembly approaches to refine expectations for how species relatedness influences the outcome of competition. We argue that two types of species differences determine competitive exclusion with opposing effects on relatedness patterns. Importantly, this means that competition can sometimes eliminate more different and less related taxa, even when the traits underlying the relevant species differences are phylogenetically conserved. Our argument leads to a reinterpretation of the assembly processes inferred from community phylogenetic structure.