The goal of this chapter is to delineate how abiotic conditions, regional processes, and species interactions influence species diversity at local scales in drylands. There is a very rich literature that bears on this topic, but here we focus on mechanisms that promote or constrain local diversity and ask how these factors apply to deserts. We ask, “What is different about deserts, relative to other habitats, in their patterns of diversity, temporal variability in productivity, and spatial heterogeneity?” We assess how such differences might modify extant theory, and sketch relevant examples. Compared with other biomes, productivity, population densities, and community biomass are much lower in deserts, and temporal heterogeneity is typically higher. Do these differences imply distinct ecological processes and patterns in deserts? Or, do processes operate in deserts in similar ways as in tropical forests or grasslands? For example, it is often assumed that abiotic factors are more important in deserts. If so, how do abiotic factors modify biotic interactions? How do we integrate physical and biotic interactions? More generally, we ask what should be the main goals and approaches of a research program to understand the role of species interactions in determining community structure in drylands, as modified by abiotic factors and regional processes. . . . What Is Different About Drylands? . . . Deserts are traditionally perceived as relatively simple ecosystems harboring low species diversity. Yet increasing evidence suggests that desert communities can be highly diverse and complex. To our knowledge the only systematic analysis of the relative diversity in desert versus nondesert communities was compiled by Polis (1991a). These data suggest that patterns differ widely among taxonomic groups. In some cases, deserts support high diversity, comparable to or even higher than nonarid areas (see Polis 1991b). For example, while avian (Wiens 1991) and anuran (Woodward and Mitchell 1991) diversities are low compared with other biomes, desert annual plants show extremely high species diversity (Inouye 1991). Ants, succulent plants, lizards, scorpions, and tenebrionid beetles also have relatively high diversity in deserts (Polis 1991a–c, Wiens 1991). But, while very high diversity may occur, local diversity varies greatly in space and time (e.g., ants and annual plants: Danin 1977, Inouye 1991, MacKay 1991).