The coexistence of competing species is a long-lasting puzzle in evolutionary ecology research. Despite abundant experimental evidence showing that the opportunity for coexistence decreases as niche overlap increases between species, bacterial species and strains competing for the same resources are commonly found across diverse spatially heterogeneous habitats. We thus hypothesized that the spatial scale of competition may play a key role in determining bacterial coexistence, and interact with other mechanisms that promote coexistence, including a growth-motility tradeoff. To test this hypothesis, we let two Pseudomonas putida strains compete at local and regional scales by inoculating them either in a mixed droplet or in separate droplets in the same Petri dish, respectively. We also created conditions that allow the bacterial strains to disperse across abiotic or fungal hyphae networks. We found that competition at the local scale led to competitive exclusion while regional competition promoted coexistence. When competing in the presence of dispersal networks, the growth-motility tradeoff promoted coexistence only when the strains were inoculated in separate droplets. Our results provide a mechanism by which existing laboratory data suggesting competitive exclusion at a local scale is reconciled with the widespread coexistence of competing bacterial strains in complex natural environments with dispersal.