A large body of theory predicts that populations diffusing in heterogeneous environments reach higher total size than if non-diffusing, and, paradoxically, higher size than in a corresponding homogeneous environment. However, this theory and its assumptions have not been rigorously tested. Here, we extended previous theory to include exploitable resources, proving qualitatively novel results, which we tested experimentally using spatially diffusing laboratory populations of yeast. Consistent with previous theory, we predicted and experimentally observed that spatial diffusion increased total equilibrium population abundance in heterogeneous environments, with the effect size depending on the relationship between r and K. Refuting previous theory, however, we discovered that homogeneously distributed resources support higher total carrying capacity than heterogeneously distributed resources, even with species diffusion. Our results provide rigorous experimental tests of new and old theory, demonstrating how the traditional notion of carrying capacity is ambiguous for populations diffusing in spatially heterogeneous environments.