Character displacement, in which coevolution of similar species alters their phenotypes, can be difficult to identify on the basis of observational data alone. In two-species systems, the most commonly identified (i.e., classic) resulting pattern is greater phenotypic difference between species in sympatry than allopatry. We show that restricting studies to this pattern may exclude many instances of character displacement, particularly in the presence of spatial environmental gradients. We present four spatial models of character displacement in quantitative traits affecting competition and hybridization between the species. Our models highlight the connections between range limits and character displacement in continuous space. We conclude that the classic pattern is less likely to occur for a trait affecting resource acquisition than for a trait affecting mate choice. We also show that interspecific hybridization (when hybrids are inviable), even in very small amounts, has marked effects on the shape and stability of borders between species and the nature of character displacement. A survey of the empirical literature shows that character displacement studies often lack analysis of spatial phenotype and abundance data. We recommend more careful spatial sampling in character displacement studies, and we illustrate how comparison of clines in mean phenotype in sympatry and allopatry can be used to suggest the action of character displacement.