Caulerpa taxifolia, a green alga with a circumtropical distribution, was observed for the first time in the Mediterranean in 1984. At present it covers an area of 1000-2000 ha, which is increasing by a factor of 2 to 10 annually. The Mediterranean plants have some morphological and physiological differences from their tropical counterparts; they colonize a wide range of biotopes, from surface to 20-30 meters depth, and have been collected down to 100 meters depth. Caulerpa taxifolia outcompetes native seaweeds due to its high growth rate, its total substrate occupation, its improved light access, the increased sedimentation rates it creates, and the synthesis of secondary metabolites (mono and sesqui-terpenes). The concentration of these metabolites changes seasonally, and strongly affects grazing by the sea-urchin Paracentrotus lividus. The assemblages dominated by Caulerpa taxifolia show a reduced number of other alga1 species and a low diversity. Populations of sea-urchins, fishes, amphipods and polychaetes are also affected. Based on preliminary studies, some special features concerning the functioning of an hypothetic future ecosystem dominated by Caulerpa taxifolia are predicted. If Caulerpa taxifolia continues to spread into the Mediterranean at present rates, we will witness a major ecological event, with a strong decrease of eco-diversity (and perhaps of bio-diversity, too) in Mediterranean coastal waters.