Pioneering work by J. Stan Cobb described how habitat architecture and body size scaling affect shelter-related behavior of American lobsters. Subsequent research suggested that shelter availability and competition could set local carrying capacity and demographics for this species. To determine how shelter spacing affects population density, the intensity of intraspecific competition and the distribution of body size for this species, I deployed sets of 10 identically sized artificial shelters spaced at distances of 2.5, 0.5, 1.0, 1.5 and 2.0 meters on otherwise featureless substrate at 10 m depth in mid-coast Maine, U.S.A. Five sets had two parallel strings of five opposing shelters and an additional linear string set 2 m apart without opposing shelters was the most widely separated treatment. Shelters spaced 1 m apart and closer had higher lobster population densities, more intraspecific competition and higher proportions of empty shelters. Surprisingly, lobsters there were also significantly smaller, declining from 62.7 mm to 50.8 on the carapace (CL) for 2 m linear to 0.25 m spaced shelters, respectively. Nearly all 932 lobsters measured in this study were juvenile (< 90 mm CL) and preharvestable (<83 mm CL) sized, so mate selection and fishing effects were unlikely. At the scale of the experiment, larger lobsters leave or avoid areas of high lobster population density and intense competition for areas of low population density and relaxed competition (called “demographic diffusion”). Scuba surveys in coastal zones found lobster population densities scale with shelter densities and were highest in boulder habitat where, like the experiment, more than half the shelters were vacant. Fisheries independent scuba and trawl surveys in Maine's shallow coastal zone repeatedly recorded declines of preharvestable lobsters larger than 60 mm CL in size and increases of those sizes offshore and in deep water. It is possible that this demographic diffusion is driven by behaviors associated with intraspecific shelter competition.