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The jellyfish <i>Cassiopea xamachana</i> and <i>C. frondosa</i> co-occur within some habitats in the Florida Keys, but the frequency with which this occurs is low. It is hypothesized that the symbiosis with different dinoflagellates in the Symbiodiniaceae is the reason: the medusae of <i>C. xamachana</i> contain heat-resistant <i>Symbiodinium microadriaticum</i> (ITS-type A1), whereas <i>C. frondosa</i> has heat-sensitive <i>Breviolum</i> sp. (ITS-type B19). Cohabitation occurs at depths of about 3–4 m in Florida Bay, where the water is on average 0.36 °C cooler, or up to 1.1 °C cooler per day. <i>C. frondosa</i> tends not to be found in the warmer and shallower (<2 m) depths of Florida Bay. While the density of symbionts is about equal in the small jellyfish of the two species, large <i>C. frondosa</i> medusae have a greater density of symbionts and appear darker in color compared to large <i>C. xamachana</i>. However, the number of symbionts per amebocyte are about the same, which implies that the large <i>C. frondosa</i> has more amebocytes than the large <i>C. xamachana</i>. The photosynthetic rate is similar in small medusae, but a greater reduction in photosynthesis is observed in the larger medusae of <i>C. xamachana</i> compared to those of <i>C. frondosa</i>. Medusae of <i>C. xamachana</i> have greater pulse rates than medusae of <i>C. frondosa</i>, suggestive of a greater metabolic demand. The differences in life history traits of the two species were also investigated to understand the factors that contribute to observed differences in habitat selection. The larvae of <i>C. xamachana</i> require lower concentrations of inducer to settle/metamorphose, and they readily settle on mangrove leaves, submerged rock, and sand compared to the larvae of <i>C. frondosa</i>. The asexual buds of <i>C. xamachana</i> are of a uniform and similar shape as compared to the variably sized and shaped buds of <i>C. frondosa</i>. The larger polyps of <i>C. frondosa</i> can have more than one attachment site compared to the single holdfast of <i>C. xamachana</i>. This appears to be an example of niche diversification that is likely influenced by the symbiont, with the ecological generalist and heat-resistant <i>S. microadriaticum</i> thriving in <i>C. xamachana</i> in a wider range of habitats as compared to the heat-sensitive symbiont <i>Breviolum</i> sp., which is only found in <i>C. frondosa</i> in the cooler and deeper waters.