The balance of interaction types determines the assembly and stability of ecological communities.

What determines the assembly and stability of complex communities is a central question in ecology. Past work has suggested that mutualistic interactions are inherently destabilizing. However, this conclusion relies on the assumption that benefits from mutualisms never stop increasing. Furthermore, almost all theoretical work focuses on the internal (asymptotic) stability of communities assembled all at once. Here, we present a model with saturating benefits from mutualisms and sequentially assembled communities. We show that such communities are internally stable for any level of diversity and any combination of species interaction types. External stability, or resistance to invasion, is thus an important but overlooked measure of stability. We demonstrate that the balance of different interaction types governs community dynamics. A higher fraction of mutualistic interactions can increase the external stability and diversity of communities as well as species persistence, if mutualistic interactions tend to provide unique benefits. Ecological selection increases the prevalence of mutualisms, and limits on biodiversity emerge from species interactions. Our results help resolve long-standing debates on the stability, saturation and diversity of communities.