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We tested the hypothesis that environmental heterogeneity can maintain genetic variation in life-history traits within populations of the clonal plant Ranunculus reptans. This may be important for the further evolution and potential adaptation to environmental change. Moreover, we asked to what extent environmental heterogeneity can also reveal trade-offs among fitness components, in particular between sexual reproduction and clonal growth. In the natural habitat of R. reptans two distinct types of environment can often be found within 10 m distance: vegetation-sparse zones close to the water (“lake”) and zones of competition with grasses (mostly Agrostis stolonifera) more inland (“land”). We grew vegetative offspring of 16 land genotypes and 16 lake genotypes from four populations in a plant room. Cuttings from each genotype were grown with and without competition by the grass A. stolonifera and on two different substrates, sand and gravel. We found considerable environmental (E) and genetic (G) variation in life-history traits. Competition strongly reduced growth, branching, flowering, and final biomass. Lake genotypes invested more into sexual reproduction (measured as proportion of ramets that flowered), whereas land genotypes invested more into vegetative reproduction (proportion of rooted ramets). Significant G×E interactions were consistent with a home-away effect: land-genotypes performed better if grown under competition, lake-genotypes without competition. These results indicate that genetic variation and phenotypic plasticity in life-history traits of R. reptans are maintained in a heterogeneous environment, thereby supporting the main hypothesis stated above. They further demonstrate that genetic differentiation occurs even over very short distances (10 m). We also found a significant genetic trade-off between sexual and vegetative reproduction (negative genetic correlation between the proportion of flowering ramets and the proportion of rooted ramets). In response to the supplementary question posed above, this suggests that the environmental heterogeneity finds its correspondence in the “genetic integration” of life-history traits within the phenotype of R. reptans.