Disentangling the ecological effects of biological invasions from those of other human disturbances is crucial to understanding the mechanisms underlying ongoing biotic homogenization. We evaluated whether the exotic seaweed, Caulerpa racemosa, is the primary cause of degradation (i.e., responsible for the loss of canopy-formers and dominance by algal turfs) on Mediterranean rocky reefs, by experimentally removing the invader alone or the entire invaded assemblage. In addition, we assessed the effects of enhanced sedimentation on the survival and recovery of canopy-forming macroalgae at a relatively pristine location and how their loss affects the ability of C. racemosa to conquer space. C. racemosa did not invade dense canopy stands or influence their recovery in cleared plots. Competition with C. racemosa could not explain the rarity of canopy-forming species at degraded sites. Removing the assemblages invaded by C. racemosa and preventing reinvasion did not trigger the transition from algal turfs to canopies, but it enhanced the cover of morphologically complex erect macroalgae under some circumstances. Once established, C. racemosa, enhancing sediment accumulation, favors algal turfs over erect algal forms and enables them to monopolize space. Our results show that introduced species that rely on disturbance to establish can subsequently become the main drivers of ecological change.