Neutral and niche processes are generally considered to interact in natural communities along a continuum, exhibiting community patterns bounded by pure neutral and pure niche processes. The continuum concept uses niche separation, an attribute of the community, to test the hypothesis that communities are bounded by pure niche or pure neutral conditions. It does not accommodate interactions via feedback between processes and the environment. By contrast, we introduce the Community Assembly Phase Space (CAPS), a multi-dimensional space that uses community processes (such as dispersal and niche selection) to define the limiting neutral and niche conditions and to test the continuum hypothesis. We compare the outputs of modelled communities in a heterogeneous landscape, assembled by pure neutral, pure niche and composite processes. Differences in patterns under different combinations of processes in CAPS reveal hidden complexity in neutral–niche community dynamics. The neutral–niche continuum only holds for strong dispersal limitation and niche separation. For weaker dispersal limitation and niche separation, neutral and niche processes amplify each other via feedback with the environment. This generates patterns that lie well beyond those predicted by a continuum. Inferences drawn from patterns about community assembly processes can therefore be misguided when based on the continuum perspective. CAPS also demonstrates the complementary information value of different patterns for inferring community processes and captures the complexity of community assembly. It provides a general tool for studying the processes structuring communities and can be applied to address a range of questions in community and metacommunity ecology.