Flooding and land use changes can be a significant source of nutrients to wetlands and contribute to ecosystem changes at a community level. We studied changes in vegetation composition and peat properties in a New Zealand wetland incorporated into a flood control scheme. Lack of hydrological records pre-development of the flood control scheme allowed the opportunity to use nutrient and physical indicators developed for restiad vegetation groups, to identify if increased flooding was the primary cause for ecological succession. Vegetation changes along a 2.3-km transect were related to hydrological processes, peat characteristics and atmospheric ammonia inputs. Measurements for peat and vegetation composition were taken from 27 sites, whereas hydrological analysis incorporated seven automated water level sites and a historical investigation of 46 years of river flood records. Ammonia deposition was higher on the farmland/wetland fringe (4.0 kg N ha−1 year−1) but decreased to background levels (2–2.5 kg N ha−1 year−1) 500 m into the wetland. Classification and ordination of vegetation data with environmental variables identified six main groups along a gradient from low nutrients and stable water tables (farthest from the river) to high nutrients and a dynamic water table near the river. Invasion over 50 years of the native scrub tree Leptospermum scoparium into restiad bog was linked to enhanced nutrient inputs and physical degradation from flooding, portrayed through levels higher than restiad indicator target ranges. This study shows that target ranges for vegetation indicators can be used as a tool to identify ecological succession and invasion. Copyright © 2012 John Wiley & Sons, Ltd.