Ecosystem properties can be positively affected by plant functional diversity and compromised by invasive alien plants. We performed a community assembly study in mesocosms manipulating different functional diversity levels for native grassland plants (communities composed by 1, 2 or 3 functional groups) to test if functional dispersion could constrain the impacts of an invasive alien plant (Solidago gigantea) on soil fertility and plant community biomass via complementarity. Response variables were soil nutrients, soil water nutrients and aboveground biomass. We applied linear mixed-effects models to assess the effects of functional diversity and S. gigantea on plant biomass, soil and soil water nutrients. A structural equation model was used to evaluate if functional diversity and invasive plants affect soil fertility directly or indirectly via plant biomass and soil pH. Invaded communities had greater total biomass but less native plant biomass than uninvaded ones. While functional diversity increased nutrient availability in the soil solution of uninvaded communities, invasive plants reduced nutrient concentration in invaded soils. Functional diversity indirectly affected soil water but not soil nutrients via plant biomass, whereas the invader reduced native plant biomass and disrupted the effects of diversity on nutrients. Moreover, invasive plants reduced soil pH and compromised phosphate uptake by plants, which can contribute to higher phosphate availability and its possible accumulation in invaded soils. We found little evidence for functional diversity to constrain invasion impacts on nutrients and plant biomass. Restoration of such systems should consider other plant community features than plant trait diversity to reduce establishment of invasive plants.