Caulerpa taxifolia is a habitat-forming green alga that has invaded several temperate regions worldwide. Although C. taxifolia covers large areas of soft-sediment habitat, little is known about its effects on soft-sediment invertebrate assemblages. We compared soft-sediment macroinvertebrate assemblages in 2 estuaries in Southeastern Australia invaded by C. taxifolia to examine 2 main predictions: (1) areas covered with C. taxifolia will have different assemblages compared to unvegetated sediment because infauna are inhibited but epifauna are facilitated, and (2) areas with C. taxifolia will have different assemblages compared to those with native seagrasses (Halophila ovalis and Zostera capricorni) because infauna are inhibited but. epifauna are not. Multidimensional scaling and ANOSIM showed differences in invertebrate assemblages between all habitats. In C. taxifolia, infauna were less abundant and epifauna were more abundant compared to unvegetated sediment. However, when compared to native seagrasses, epifauna in C. taxifolia were more abundant than in H. ovalis in one estuary but less abundant than in Z. capricorni in another estuary, while infauna in C. taxifolia were less abundant than in both seagrass species. The consistently low infaunal abundance in C. taxifolia, irrespective of infaunal feeding mode, suggests C. taxifolia impacts infauna generally. Examination of environmental factors potentially responsible for the low abundance of infauna indicated that differences in redox potential (and associated chemical changes) may explain patterns in abundance of infauna among habitats. Our findings indicate that invasion by C. taxifolia causes important changes to soft-sediment macroinvertebrate assemblages and suggest that infauna may be particularly vulnerable to invasion because of changes to sediment chemistry.