The importance of density dependence in natural communities continues to spark much debate because it is fundamental to population regulation. We used temporal manipulations of density to explore potentially stabilizing density dependence in early survivorship among six local populations of a tropical damselfish (Dascyllus fiavicaudus). Specifically, we tested the premise that spatial heterogeneity in the strength of temporal density dependence would reflect variation in density of predators, the agent of mortality. Our field manipulations revealed that mortality among successive cohorts of young fishes was density dependent at each reef, but that its strength varied by similar to 1.5 orders of magnitude. This spatial heterogeneity was well predicted by variation among the six reefs in the density of predatory fishes that consume juvenile damselfishes. Because density dependence arose from competition for enemy-free space within a shelter coral, the mortality consequence of the competition depended on the neighborhood density of predators. Thus, the scale of heterogeneity in the density dependence largely reflected attributes of the environment that shaped the local abundance of predators. These results have important implications for how ecologists explore regulatory processes in nature. Failure to account for spatial variation could frequently yield misleading conclusions regarding density dependence as a stabilizing process, obscure underlying mechanisms influencing its strength, and provide no insight into the spatial scale of the heterogeneity. Further, models of population dynamics will be improved when experimental approaches better estimate the magnitude and causes of variation in strength of stabilizing density dependence.