The non-native seagrass species Halophila stipulacea has spread throughout the Eastern Caribbean since 2002, and could potentially impact the functioning of local seagrass ecosystems. Important characteristics for invasiveness, such as dispersal, recruitment and expansion of H. stipulacea at a local scale, are unknown. We assessed H. stipulacea expansion rates within Lac Bay, Bonaire, Dutch Caribbean (7 km2), since its establishment in 2010 and tested the settlement potential of uprooted vegetative fragments of H. stipulacea. Using 49 fixed locations, we observed that between 2011 and 2015 the occurrence of H. stipulacea in the bay increased significantly from 6% to 20% while native Thalassia testudinum occurrence decreased significantly from 53% to 33%. Free-floating H. stipulacea fragments that were collected and tethered above the sediment rooted within 10 days with a settlement success rate of 100%. The growth of settled fragments was on average 0.91 shoots d−1. The ongoing shift from native T. testudinum to introduced H. stipulacea dominated meadows may have important consequences for multiple Caribbean seagrass ecosystem functions. Given the large difference in size between the two seagrass species, functions such as coastal protection, habitat structure, food availability, and the stability and resilience of these systems can be altered. The next steps towards modelling future expansion of H. stipulacea throughout the Caribbean and beyond should include the assessment of fragment viability and dispersal distance, and the impacts of natural and anthropogenic disturbance on vegetative fragment density, dispersion and settlement by this species.