Typically competition for a resource is represented by exploitative competition, a density-mediated indirect interaction between predators affecting the density of a shared prey. But competition can also occur through trait-mediated (nonlethal) pathways when predators induce trait modifications in prey. We examined the role that density and trait-mediated indirect interactions play in competition between age-0 fish and the invasive invertebrate planktivore, Bythotrephes longimanus, in Lake Michigan’s offshore pelagic community. Specifically, we used field survey data, laboratory experiments, and models (based on bioenergetics and encounter rates) to predict the indirect effects of Bythotrephes on fish. We found that both fish and Bythotrephes induce daytime downward migration in their prey, Daphnia mendatoe. Consumption of Daphnia by fish declines sharply as Bythotrephes density increases, resulting primarily from increases in the extent that Daphnia migrate. Increased migration diminishes fish-Daphnia spatial overlap and reduces Daphnia birth rate due to exposure to cooler water temperature. These nonlethal effects were greater than effects due to Daphnia density reductions caused by Bythotrephes consumption. The net outcome is that Bythotrephes negatively affects fish growth primarily through trait-mediated indirect effects caused by induced changes in prey behavior. Our findings provide an example in a natural system of how interactions between competitors can be strongly influenced through adaptive behavioral responses of shared prey. In addition, we suggest that short evolutionary history does not exclude invasive predators from having strong trait effects in native communities.