Resource distribution heterogeneity offers niche opportunities for species with different functional traits to develop and potentially coexist. Available light (photosynthetically active radiation or PAR) for suspended algae (phytoplankton) may fluctuate greatly over time and space. Species-specific light acquisition traits capture important aspects of the ecophysiology of phytoplankton and characterize species growth at either limiting or saturating daily PAR supply. Efforts have been made to explain phytoplankton coexistence using species-specific light acquisition traits under constant light conditions, but not under fluctuating light regimes that should facilitate non-equilibrium coexistence. In the well-mixed, hypertrophic Lake TaiHu (China), we incubated the phytoplankton community in bottles placed either at fixed depths or moved vertically through the water column to mimic vertical mixing. Incubations at constant depths received only the diurnal changes in light, while the moving bottles received rapidly fluctuating light. Species-specific light acquisition traits of dominant cyanobacteria (Anabaena flos-aquae, Microcystis spp.) and diatom (Aulacoseira granulata, Cyclotella pseudostelligera) species were characterized from their growth-light relationships that could explain relative biomasses along the daily PAR gradient under both constant and fluctuating light. Our study demonstrates the importance of interspecific differences in affinities to limiting and saturating light for the coexistence of phytoplankton species in spatially heterogeneous light conditions. Furthermore, we observed strong intraspecific differences in light acquisition traits between incubation under constant and fluctuating light – leading to the reversal of light utilization strategies of species. This increased the niche space for acclimated species, precluding competitive exclusion. These observations could enhance our understanding of the mechanisms behind the Paradox of the Plankton.