Frequency
Zigbee operates on 2.4GHz — the same band as WiFi and Bluetooth. This causes congestion in busy homes. Z-Wave operates on 900MHz (sub-GHz) — far less interference.
Range
Zigbee: ~30 feet per device hop. Mesh extends this significantly. Z-Wave: ~100 feet per hop — nearly 3x longer range than Zigbee per device.
Device Count
Zigbee supports 65,000+ devices per network. Z-Wave supports up to 232 devices per controller. For large installations, Zigbee scales further.
Device Availability
Zigbee has far more devices available — Philips Hue, IKEA, Aqara, Sengled, and hundreds of others. Z-Wave has fewer but covers locks, sensors and switches well.
Hub Requirement
Both require a hub with the relevant radio. SmartThings and Hubitat support both. Home Assistant supports both with USB dongles. No difference.
Price
Zigbee devices are generally cheaper — entry-level Zigbee bulbs from $8. Z-Wave devices cost more — most Z-Wave switches start at $30+. Zigbee wins on budget.