Islands can serve as model systems for understanding how biological invasions affect community structure and ecosystem function. Here we show invasion by the alien crazy ant Anoplolepis gracilipes causes a rapid, catastrophic shift in the rain forest ecosystem of a tropical oceanic island, affecting at least three trophic levels. In invaded areas, crazy ants extirpate the red land crab, the dominant endemic consumer on the forest floor. In doing so, crazy ants indirectly release seedling recruitment, enhance species richness of seedlings, and slow litter breakdown. In the forest canopy, new associations between this invasive ant and honeydew-secreting scale insects accelerate and diversify impacts. Sustained high densities of foraging ants on canopy trees result in high population densities of host-generalist scale insects and growth of sooty moulds, leading to canopy dieback and even deaths of canopy trees. The indirect fallout from the displacement of a native ‘keystone’ species by an ant invader, itself abetted by introduced/cryptogenic mutualists, produces synergism in impacts to precipitate invasional ‘meltdown’ in this system.