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Insect and disease outbreak is an important cause of selective species removal and accompanying functional change in North American forests. Outbreak of hemlock woolly adelgid, Adelgies tsugae– HWA, is causing selective removal of eastern hemlock Tsuga canadensis at a regional scale. Impacts of outbreak-caused canopy mortality and shifts in dominant species on litter decay were compared across sites that range in HWA-caused canopy damage and subsequent canopy dominance by black birch Betula lenta. Senescent litter from eastern hemlock, black birch, and equal litter mixes were decomposed in the field for 36 months within nine sites in Connecticut and Massachusetts USA. Mass loss and % N accumulation of black birch was 65% and 52% greater compared to eastern hemlock. In contrast, outbreak related canopy damage increased litter mass loss by 11.5% in high mortality stands relative to uninfested stands but canopy damage had no impact on % N dynamics. Non-additive effects of litter mixing influenced chemical dynamics of decaying litter; black birch accumulated less N and eastern hemlock accumulated more N compared to each species decaying alone. However, these changes offset and mixed litter bags overall showed no differences in N dynamics compared to values from each species decaying alone. In eastern hemlock stands invaded by hemlock woolly adelgid, canopy damage influences the rates and dynamics of decay but species differences between hemlock and black birch leaf litter are the dominant mechanisms of decomposition changes and a long-lasting driver of increased N cycling rates. Species shifts may be the dominant driver of altered ecosystem processes for other insect outbreaks, particularly when replacement species have very different characteristics regulating decomposition and N cycling.