Dynamics of a rodent community were studied in the Negev Desert Highlands (Israel) during 8 years on 24 permanent 1-ha plots representing six main habitat types. Based on theoretical models of habitat selection, we hypothesized that niche overlap between species of the same spatial guild should increase with density faster than that between species of different guilds. Data were analysed using multivariate (principal component and discriminant) analyses to test the hypothesis. Density changes in most rodent species followed fluctuations in the amount of rainfall. Habitat niche breadth was density-dependent in six species and density-independent in four species. Significant habitat shifts and switches of spatial guild membership were found in three of 10 species. Pairwise values of habitat overlap were significantly and positively correlated with density only in species pairs where both species demonstrated density-dependent variation of habitat breadth. In most other pairs of species, overlap values were density-independent. Comparison of changes in average within-season values of habitat overlap with density within and among spatial guilds directly supported our hypothesis demonstrating faster increase of niche overlap with density between species of the same spatial guild than between species of different guilds.