Lantana camara, a shrub of Central and South American origin, has become invasive across dry forests worldwide. The effect of the thicket-forming habit of L. camara as a dispersal and recruitment barrier in a community of native woody seedlings was examined in a 50-ha permanent plot located in the seasonally dry forest of Mudumalai, southern India. Sixty 100-m2 plots were enumerated for native woody seedlings between 10–100 cm in height. Of these, 30 plots had no L. camara thickets, while the other 30 had dense thickets. The frequency of occurrence and abundance of seedlings were modelled as a function of dispersal mode (mammal, bird or mechanical) and affinities to forest habitats (dry forest, moist forest or ubiquitous) as well as presence or absence of dense L. camara thickets. Furthermore, frequency of occurrence and abundance of individual species were also compared between thickets and no L. camara. At the community level, L. camara density, dispersal mode and forest habitat affinities of species determined both frequency of occurrence and abundance of seedlings, with the abundance of dry-forest mammal-dispersed species and ubiquitous mechanically dispersed species being significantly lower under L. camara thickets. Phyllanthus emblica and Kydia calycina were found to be significantly less abundant under L. camara, whereas most other species were not affected by the presence of thickets. It was inferred that, by affecting the establishment of native tree seedlings, L. camara thickets could eventually alter the community composition of such forests.