Understanding the relationships between environmental fluctuations, population dynamics and species interactions in natural communities is of vital theoretical and practical importance. This knowledge is essential in assessing extinction risks in communities that are, for example, pressed by changing environmental conditions and increasing exploitation. We developed a model of density dependent population renewal, in a Lotka–Volterra competitive community context, to explore the significance of interspecific interactions, demographic stochasticity, population growth rate and species abundance on extinction risk in populations under various autocorrelation (colour) regimes of environmental forcing. These factors were evaluated in two cases, where either a single species or the whole community was affected by the external forcing. Species’ susceptibility to environmental noise with different autocorrelation structure depended markedly on population dynamics, species’ position in the abundance hierarchy and how similarly community members responded to external forcing. We also found interactions between demographic stochasticity and environmental noise leading to a reversal in extinction probabilities from under- to overcompensatory dynamics. We compare our results with studies of single species populations and contrast possible mechanisms leading to extinctions. Our findings indicate that abundance rank, the form of population dynamics, and the colour of environmental variation interact in affecting species extinction risk. These interactions are further modified by interspecific interactions within competitive communities as the interactions filter and modulate the environmental noise.