[Truncated abstract] Mediterranean southwest Australia, a global biodiversity hotspot, has nutrient deficient soils, exacting climatic conditions and is species rich with 7380 native vascular plant species, of which 49% are endemic. The region is expected to experience one of the world's highest degrees of biodiversity loss and change in the coming decades, with introduced species presenting a major threat. Limited knowledge is available on the mechanisms of ecosystem change associated with invasion and fire in this biodiversity hotspot region. Banksia woodland, an iconic complex species-rich natural ecosystem is one of the major vegetation types of the coastal sandplain, extending from 15 to 90 km inland and 400 kms along the west coast. The following hypothesis was tested to explore the ecological impacts of invasion: Is invasion of Banksia woodland by the introduced species Ehrharta calycina and Pelargonium capitatum accompanied by an alteration in ecosystem properties and processes, whereby the degree of change is related to fire frequency and abundance of introduced species? Different vegetation conditions, i.e. Good Condition (GC), Medium Condition (MC), Poor Condition invaded by Ehrharta calycina (PCe) and Poor Condition invaded by Pelargonium capitatum (PCp) were utilized for field assessments. ... In the soil seed bank, species numbers and germinant density decreased significantly for native and seeder (fire sensitive) species between GC sites and invaded sites. Surprisingly 52% of germinants at GC sites were from introduced species, with much of the introduced soil seed bank being persistent. Native species were dominated by perennial shrubs, herbs and sedges, while introduced species were dominated by perennial and annual grasses and herbs. Invasion by introduced species, associated with frequency of fire, altered the ecosystem, thus disadvantaging native species and improving conditions for even greater invasion within the Banksia woodland. Significantly higher soil phosphorus P (total) and P (HCO3) were found at PCe and PCp sites compared to GC sites. Leaf nutrient concentrations of phosphorus were significantly higher, and potassium and copper significantly lower in PCe and PCp sites, with introduced species having significantly greater concentrations than native species (except Manganese). This study demonstrated the key role of phosphorus in the Banksia woodland, in contrast to other research which identified nitrogen as the major nutrient affected by invasion. Higher levels of soil and leaf phosphorus, loss of species diversity and function, changes in fire ecology and canopy cover and a limited native soil seed bank make restoration of a structural and functional Banksia woodland from the soil seed bank alone unlikely. Without management intervention, continuing future fire is likely to result in a transition of vegetation states from GC to MC and MC to PC. The knowledge gained from this study provides a better ecological understanding of the invasive process. This enhanced understanding will enable the development of adaptive management strategies to improve conservation practices within a biodiversity hotspot and reduce the impact of the key threatening process of invasion.