Dispersal-assembly theories of species coexistence posit that environmental factors play no role in explaining community diversity and structure. Dispersal-assembly theories shed light on some aspects of community structure such as species-area and species-abundance relationships. However, species' environmental associations also affect these measures of community structure. Measurements of species' niche breadth and overlap address this influence. Using a new continuous measure of niche and a dispersal-assembly null model that maintains species' niche breadth and aggregation, we tested two hypotheses assessing the effects of habitat heterogeneity on the ability of dispersal-assembly theories to explain community niche structure. We found that in both homogenous and heterogeneous environments dispersal-assembly theories cannot fully explain observed niche structure. The performance of the dispersal-assembly null models was particularly poor in heterogeneous environments. These results indicate that non-dispersal based mechanisms are in part responsible for observed community structure and measures of community structure which include species' environmental associations should be used to test theories of species diversity.