Dominance of invasive species is often assumed to be due to a superior ability to acquire resources. However, dominance in plant communities can arise through multiple interacting mechanisms, including disturbance. Inter-specific competition can be strongly affected by abiotic conditions, which can determine the outcome of competitive interactions. We evaluated competition and disturbance as mechanisms governing dominance of 'Phyla canescens' (hereafter lippia), an invasive perennial forb from South America, in 'Paspalum distichum' (perennial grass, hereafter water couch) meadows in floodplain wetlands of eastern Australia. Water couch meadows (in the study area) are listed under the Ramsar Convention due to their significance as habitat for migratory waterbirds. In the field, we monitored patterns of vegetation boundaries between the two species in response to flooding. Under controlled glasshouse conditions, we explored competitive interactions between the native water couch and lippia subject to different soil moisture/inundation regimes. We did this using a pairwise factorial glasshouse experiment that manipulated neighbor density (9 treatments) and soil moisture/inundation (4 treatments). In the field trial, inundation increased the cover of water couch. Under more controlled conditions, the invader had a competitive effect on the native species only under dry soil conditions, and was strongly inhibited by inundation. This suggests that dry conditions favor the growth of the invader and wetter (more historical) conditions favor the native grass. In this system, invader dominance is governed by altered disturbance regimes which give the invader a competitive advantage over the native species.