1. Cryptic species diversity poses evolutionary questions about its origin and maintenance, and ecological questions about the coexistence of seemingly identical species. 2. We examine patterns of morphological and life history differentiation in three sympatric cryptic species of freshwater amphipods within the Hyalella azteca species complex. These species are separated by extensive molecular evolution, but appear similar in phenotype. Species were collected from the littoral zone of a small kettle lake in Michigan, U.S.A., and identified to species by molecular genetic methods. 3. Two of the species were similar, differing only in female size, whereas the third was larger in body size and had larger clutches of smaller eggs than the other two. There were differences between the species also in pleon spine length and antennal segment number. 4. An analysis of allozyme variation among the cryptic species in three lakes suggests that the species are reproductively isolated within lakes. 5. We suggest that phenotypic similarity of these species is maintained by size-selective predation by fish. The small, but statistically significant, differences in body size may form the axis for a tradeoff between resource exploitation and predator avoidance, a condition that can foster coexistence of phenotypically similar species.