Competition between plants for resources is an important selective force. As a result competition through natural selection determines vegetation functioning and associated atmospheric interactions. Our aim was to investigate how the coupling between vegetation and atmosphere is influenced by plant competition. Though included in some coupled vegetation-atmosphere models, little attention has been paid to systematically study the impact of plant competition in determining the evolution of surface and atmospheric variables. We used a coupled vegetation-atmosphere model and included a new representation of plant competition. We compared the model results with diurnal data from Ameriflux Bondville site over a growing season. Including competition improved LAI (Leaf Area Index) and net ecosystem exchange of CO2 (NEE) predictions; if competition was not considered, there were strong deviations from observations. Remarkably, competition increased LAI while it reduced whole stand photosynthesis, resulting in a less negative NEE. Finally, independent of competition, latent heat flux, surface temperature, specific humidity, and atmospheric CO2 are well reproduced by the model. Only the sensible heat flux was overestimated, mainly due to the imbalance in the surface energy balance that can lead to lower measured sensible heat fluxes. Sensitivity analysis showed that the importance of plant competition on model outcomes increases with more nitrogen and water availability and may differ between soil types. We thus quantified the potential effect of plant competition in a coupled vegetation-atmosphere system and showed that it strongly influences this system, and therefore, we propose that competition should be considered in more vegetation-atmosphere models.