One classic explanation for the remarkable diversity of flower colors across angiosperms involves evolutionary shifts among different types of pollinators with different color preferences. However, the pollinator shift model fails to account for the many examples of color variation within clades that share the same pollination system. An alternate explanation is the competition model, which suggests that color divergence evolves in response to interspecific competition for pollinators, as a means to decrease interspecific pollinator movements. This model predicts color overdispersion within communities relative to null assemblages. Here we combine morphometric analyses, field surveys, and models of pollinator vision with a species-level phylogeny to test the competition model in the primarily hummingbird-pollinated clade Iochrominae (Solanaceae). Results show that flower color as perceived by pollinators is significantly overdispersed within sites. This pattern is not simply due to phylogenetic history: phylogenetic community structure does not deviate from random expectations, and flower color lacks phylogenetic signal. Moreover, taxa that occur in sympatry occupy a significantly larger volume of color space than those in allopatry, supporting the hypothesis that competition in sympatry drove the evolution of novel colors. We suggest that competition among close relatives may commonly underlie floral divergence, especially in species-rich habitats where congeners frequently co-occur.