In the echiuran wormBonellia viridisRolando, the vast majority of sexually undifferentiated larvae metamorphose into dwarf males that live inside the female when exposed to females, but differentiate into females when developing in the absence of females. By means of a spatially explicit, individual-based model we examine how this specific form of environmental sex determination (ESD) affects dynamics ofBonelliapopulations and investigate the selective advantage of ESD over the more widespread genotypic sex determination (GSD). Population dynamics ofBonelliaappear rather simple and not too sensitive to parameter changes around their measured values, or to changes in distribution and sizes of inhabitable patches. Starting even from low sizes, populations soon attain equilibrium densities. Explored aspects of population dynamics indicate an advantage of ESD over GSD. Moreover, simulated invasibility experiments show that while the maternal inheritance scenario allows for fixation of GSD under some limited conditions, both the classical and proportional inheritance scenarios always lead to fixation of ESD in the population. We also show that only the ability of ESD larvae to adapt their ultimate sex both in competition for empty burrows and for mating within females gives them a competitive edge over nonadaptive response to feminising and/or masculinising signals and generally leads to fixation of ESD by small step evolution. The original hypothesis of Charnov and Bull thus needs to be refined in the sense that along with females forming an unpredictable resource for males, empty burrows are an unpredictable resource for females. [ABSTRACT FROM AUTHOR]