The indirect effects of biological invasions on native communities are poorly understood. Disruption of native ant communities following invasion by the Argentine ant (Linepithema humile) is widely reported to lead indirectly to the near complete collapse of seed dispersal services. In coastal scrub in southeastern Australia, we examined seed dispersal and handling of two native and two invasive alien plant species at Argentine ant-invaded or -uninvaded sites. The Argentine ant virtually eliminates the native keystone disperser Rhytidoponera victoriae, but seed dispersal did not collapse following invasion. Indeed, Argentine ants directly accounted for 92% of all ant-seed interactions and sustained overall seed dispersal rates. Nevertheless, dispersal quantity and quality among seed species differed between Argentine ant-invaded and -uninvaded sites. Argentine ants removed significantly fewer native Acacia retinodes seeds, but significantly more small seeds of invasive Polygala myrtifolia than did native ants at uninvaded sites. They also handled significantly more large seeds of A. sophorae, but rarely moved them >5 cm, instead recruiting en masse, consuming elaiosomes piecemeal and burying seeds in situ. In contrast, Argentine ants transported and interred P. myrtifolia seeds in their shallow nests. Experiments with artificial diaspores that varied in diaspore and elaiosome masses, but kept seed morphology and elaiosome quality constant, showed that removal by L. humile depended on the interaction of seed size and percentage elaiosome reward. Small diaspores were frequently taken, independent of high or low elaiosome reward, but large artificial diaspores with high reward instead elicited mass recruitment by Argentine ants and were rarely moved. Thus, Argentine ants appear to favour some diaspore types and reject others based largely on diaspore size and percentage reward. Such variability in response indirectly reduces native seed dispersal and can directly facilitate the spread of an invasive alien shrub.