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The impact of exotic species on native organisms is widely acknowledged, but poorly understood. Very few studies have empirically investigated how invading plants may alter delicate ecological interactions among resident species in the invaded range. We present novel evidence that antifungal phytochemistry of the invasive plant, Alliaria petiolata, a European invader of North American forests, suppresses native plant growth by disrupting mutualistic associations between native canopy tree seedlings and belowground arbuscular mycorrhizal fungi. Our results elucidate an indirect mechanism by which invasive plants can impact native flora, and may help explain how this plant successfully invades relatively undisturbed forest habitat.