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Species interactions affect plant diversity through the net effects of competition and facilitation, with the latter more prevalent in physically stressful environments when plant cover ameliorates abiotic stress. One explanation for species loss in invader-dominated systems is a shift in the competition-facilitation balance, with competition intensifying in areas formerly structured by facilitation. We test this possibility with a 10-site prairie meta-experiment along a 500-km latitudinal stress gradient, quantifying the relationships among abiotic stress, exotic dominance, and native plant recruitment over five years. The latitudinal gradient is inversely correlated with abiotic stress, with lower latitudes more moisture- and nutrient-limited. We observed strong negative effects by invasive dominant grasses on plant establishment, but only in northern sites with lower-stress environments. At these locations, disturbance was critical for recruitment by reducing the suppressive dominant (invasive) canopy. In more stressful environments to the south, the impacts of the dominant invaders on plant establishment became facilitative, and diversity was more limited by seed availability. Disturbance prevented recruitment because seedling survival depended on a protective plant canopy, presumably because the canopy reduced temperature or moisture stress. Seed limitation was similarly prevalent in all sites. Our work confirms the importance of facilitation as an organizing process for plants in higher-stress environments, even with transformations of species composition and dominance. It also demonstrates that the mechanisms regulating diversity, including invader impacts, can vary within the same plant community depending on environmental context. Because limits on native plant recruitment are environmentally contingent, management strategies that seek to increase diversity, including invader eradication, must account for site-level variations in the balance between biotic and abiotic constraints.