The persistence of antibiotic resistant (AR) bacteria in the absence of antibiotic pressure raises a paradox regarding the fitness costs associated with antibiotic resistance. These fitness costs should slow the growth of AR bacteria and cause them to be displaced by faster-growing antibiotic sensitive (AS) counterparts. Yet, even in the absence of antibiotic pressure, slower-growing AR bacteria can persist for prolonged periods of time. Here, we demonstrate a mechanism that can explain this apparent paradox. We hypothesize that lytic phage can modulate bacterial spatial organization to facilitate the persistence of slower-growing AR bacteria. Using surface-associated growth experiments with the bacterium Escherichia coli in conjunction with individual-based computational simulations, we show that phage disproportionately lyse the faster-growing AS counterpart cells located at the biomass periphery via a peripheral kill-the-winner dynamic. This enables the slower-growing AR cells to persist even when they are susceptible to the same phage. This phage-mediated selection is accompanied by enhanced bacterial diversity, further emphasizing the role of phage in shaping the assembly and evolution of bacterial systems. The mechanism is potentially relevant for any antibiotic resistance genetic determinant and has tangible implications for the management of bacterial populations via phage therapy.