The processes involved in shaping latitudinal-diversity gradients (LDGs) have been a longstanding source of debate and research. Climatic, historical and evolutionary factors have all been shown to contribute to the formation of LDGs. However, meta-analyses have shown that different clades have LDG slopes that may vary in more than one order of magnitude. Such large variation cannot be explained solely by climatic or historical factors (e.g. difference in surface area between temperate and tropical zones) given that all clades within a geographic region are subject to the same conditions. Therefore, biotic processes intrinsic to each taxonomic group could be relevant in explaining rate differences in diversity decline across latitudinal gradients among groups. In this study, we developed a model simulating multiple competing species subjected (or not) to a demographic Allee effect. We simulated the range expansion of these species across an environmental gradient to show how these two overlooked factors (competition and Allee effects) are capable of modulating LDGs. Allee effects resulted in a steeper LDG given a higher probability of local extinction and lower colonization capacity compared to species without Allee effects. Likewise, stronger competition also led to a steeper decline in species diversity compared to scenarios with weaker species antagonistic interactions. This pattern occurred mostly due to the strength of priority effects, wherein scenarios with strong competition, species that dispersed earlier in the landscape were able to secure many patches whereas late-arriving species were progressively precluded from expanding their ranges. Overall, our results suggest that the effect of biotic processes in shaping macroecological patterns could be more important than it is currently appreciated.