Spatial heterogeneity plays a crucial role in the coexistence of species. Despite recognition of the importance of self-organization in creating environmental heterogeneity in otherwise uniform landscapes, the effects of such self-organized pattern formation in promoting coexistence through facilitation are still unknown. In this study, we investigated the effects of pattern formation on species interactions and community spatial structure in ecosystems with limited underlying environmental heterogeneity, using self-organized patchiness of the aquatic macrophyte Callitriche platycarpa in streams as a model system. Our theoretical model predicted that pattern formation in aquatic vegetation – due to feedback interactions between plant growth, water flow and sedimentation processes – could promote species coexistence, by creating heterogeneous flow conditions inside and around the plant patches. The spatial plant patterns predicted by our model agreed with field observations at the reach scale in naturally vegetated rivers, where we found a significant spatial aggregation of two macrophyte species around C. platycarpa. Field transplantation experiments showed that C. platycarpa had a positive effect on the growth of both beneficiary species, and the intensity of this facilitative effect was correlated with the heterogeneous hydrodynamic conditions created within and around C. platycarpa patches. Our results emphasize the importance of self-organized patchiness in promoting species coexistence by creating a landscape of facilitation, where new niches and facilitative effects arise in different locations. Understanding the interplay between competition and facilitation is therefore essential for successful management of biodiversity in many ecosystems.