Encrusting bryozoans provide one of the few systems in the fossil record in which ecological competition can be observed directly at local scales. The macroevolutionary history of diversity of cyclostome and cheilostome bryozoans is consistent with a coupled-logistic model of clade displacement predicated on species within clades interacting competitively. The model matches observed diversity history if the model is perturbed by a mass extinction with a position and magnitude analogous to the Cretaceous/Tertiary boundary event. Although it is difficult to measure all parameters in the model from fossil data, critical factors are intrinsic rates of extinction, which can be measured. Cyclostomes maintained a rather low rate of extinction, and the model solutions predict that they would lose diversity only slowly as competitively superior species of cheilostomes diversified into their environment. Thus, the microecological record of preserved competitive interactions between cyclostome and cheilostome bryozoans and the macroevolutionary record of global diversity are consistent in regard to competition as a significant influence on diversity histories of post-Paleozoic bryozoans.