The hypothesis of niche differentiation with respect to resources is considered to be one of the most influential explanations for the maintenance of species diversity. The hypothesis has been examined extensively by testing its prediction of species-habitat association, which posits that the spatial distribution of species is highly correlated with environmental variables. However, we argue that widespread evidence of the species-habitat association lacks adequate rigor to justify the niche differentiation hypothesis. In this study, we tested whether and to what extent the observed species-habitat association could be caused by ecological processes other than niche differentiation, in a 20-ha subtropical forest plot. The niche differentiation hypothesis was evaluated by testing the species-habitat association and performing a cross-evaluation of the habitat-diversity expectation, which posits that a strong positive correlation exists between species diversity and habitat complexity. Failure to support the habitat-diversity expectation would at a minimum indicate that the niche differentiation hypothesis might not be the main underlying process of species distribution, despite prevalence of the species-habitat association in the same plot. Our analysis revealed that distributions of most species (86.11%) in the plot were significantly associated with at least one of eight topographical and soil nutrient variables. However, there was almost no significant positive correlation between species diversity and habitat complexity at various spatial scales in the same plot. The results indicate that additional caution is warranted when interpreting the species-habitat association from the niche differentiation perspective. A significant species-habitat association indicates only a species’ habitat preference. The association may reveal nothing about interspecific differences in habitat preference, which is a requirement of the niche differentiation hypothesis.