Ecological theory predicts that invasive prey can interact with native prey directly by competing for shared resources or indirectly by changing the abundance or behavior of shared native predators. However, both the study and management of invasive prey have historically overlooked indirect effects. In southern California estuaries, introduction of the Asian nest mussel Arcuatula senhousia has been linked to profound changes in native bivalve assemblages, but the mechanisms of these interactions remain unclear. We performed three field experiments to assess the mechanisms of competition between Arcuatula and native bivalves, and evaluated the potential for Arcuatula to indirectly mediate native predator–prey dynamics. We found that Arcuatula reduces the diversity, abundance, and size of native bivalve recruits by preemptively exploiting space in surface sediments. When paired with native shallow-dwelling clams (Chione undatella and Laevicardium substriatum), Arcuatula reduces adult survival through overgrowth competition. However, Arcuatula also attracts native predators, causing apparent competition by indirectly increasing predation of native clams, especially for poorly defended species. Therefore, invasive prey can indirectly increase predation rates on native competitors by changing the behavior of shared native predators, but the magnitude of apparent competition strongly depends on the vulnerability of natives to predation. Interestingly, our results indicate that the vulnerability of invasive prey to predation can greatly exacerbate impacts on their native competitors. Our findings suggest that consideration of both direct and indirect effects of invasive prey, as well as native predator–prey relationships, should lead to more effective invasive species management.