By the logic of many theories of organization, the dominance of large firms in an industry should hinder the emergence and operation of small specialist firms. Yet a variety of industries in modern economies display simultaneous trends of increased concentration and specialist proliferation. Within the perspective of organizational ecology, in the theory of resource partitioning these two trends are viewed as interdependent. The theory holds that under certain environmental and organizational conditions, the increased dominance of large firms in an industry will enhance the life chances of specialist organizations. In this article, we examine the theory of resource partitioning and the evidence that has been offered in its support. We discuss the various theoretical mechanisms that are likely to produce resource partitioning: location, customization, anti-mass-production cultural sentiment, and conspicuous status consumption. We also explore empirical issues involved in investigating these mechanisms. Finally, we describe some important but little investigated problems of the theory.