Different functional groups of macrophytes vary in their impact on aquatic ecosystem structure and processes. The introduction of new species with different growth form, combined with a stochastic event, may have serious and irreversible consequences on lake functioning. Our goals were to document and explain physical, chemical, metabolic and biotic changes in the littoral zones of a volcanic lake before and following two coinciding events: invasion by a submersed macrophyte, Hydrilla verticillata (Hydrocharitaceae), followed by a rapid increase in the lake water level (>2.5 m). We recorded plant biomass, plant tissue C:N:P stoichiometry, macroinvertebrates, water characteristics data along transects through littoral zones, and measured gas emission in controlled mesocosms and in the lake. The native emergent species, Schoenoplectus californicus (Cyperaceae), was generally not able to survive such a rapid water level increase, and Hydrilla spread and formed dense mats further preventing Schoenoplectus regeneration. The impact of another introduced species, the free‐floating Eichhornia crassipes (Pontederiaceae), was more localised, despite its much longer presence at the lake. Although the three species had comparable standing biomass, the two invader species had lower C:N:P ratios than Schoenoplectus, resulting in faster decomposition rates and indicating potential shifts in nutrient cycling within the ecosystem. The oxygen profile of the water column was altered by the non‐native species in a significantly different manner: in Eichhornia, the saturation concentrations dropped down to 30%–50% of dissolved oxygen, while oxygen supersaturation was recorded in Hydrilla. Both Schoenoplectus and Eichhornia patches exhibited comparable carbon dioxide (CO2) fluxes, sequestering 230 and 300 mg CO2 m−2 hr−1, respectively, during the day and emitting 250 and 200 mg CO2 m−2 hr−1, respectively, during the night. Contrary to these two species, Hydrilla patches sequestered CO2 during the day (34 mg CO2 m−2 hr−1) and night (44 mg CO2 m−2 hr−1). The invasive species maintained a richer community of macroinvertebrates compared to several native species (excluding Schoenoplectus), both in taxa diversity and in numbers of individuals. When the results are considered in the regional context, an increase in nutrient supply could lead to the dominance of free‐floating plants. We discussed management options more broadly considering the negative impacts of introduced species balanced against their beneficial effects, in the context of environmental changes.