Despite well-documented negative impacts of invasive species on native biota, evidence for the facilitation of native organisms, particularly by habitat-forming invasive species, is increasing. However, most of these studies are conducted at the population or community level, and we know little about the individual fitness consequences of recruitment to habitat-forming invasive species and, consequently, whether recruitment to these habitats is adaptive. We determined the consequences of recruitment to the invasive green alga Caulerpa taxifolia on the native soft-sediment bivalve Anadara trapezia and nearby unvegetated sediment. Initially, we documented the growth and survivorship of A. trapezia following a natural recruitment event, to which recruitment to C. taxifolia was very high. After 12 months, few clams remained in either habitat, and those that remained showed little growth. Experimental manipulations of recruits demonstrated that all performance measures (survivorship, growth and condition) were significantly reduced in C. taxifolia sediments compared to unvegetated sediments. Exploration of potential mechanisms responsible for the reduced performance in C. taxifolia sediments showed that water flow and water column dissolved oxygen (DO) were significantly reduced under the canopy of C. taxifolia and that sediment anoxia was significantly higher and sediment sulphides greater in C. taxifolia sediments. However, phytoplankton abundance (an indicator of food supply) was significantly higher in C. taxifolia sediments than in unvegetated ones. Our results demonstrate that recruitment of native species to habitat-forming invasive species can reduce growth, condition and survivorship and that studies conducted at the community level may lead to erroneous conclusions about the impacts of invaders and should include studies on life-history traits, particularly juveniles.