Decreasing species diversity is thought to both reduce community productivity and increase invasibility to other species. However, it remains unclear whether identical mechanisms drive both diversity–productivity and diversity–invasibility relationships. We found a positive diversity–productivity relationship and negative diversity–invasibility and productivity–invasibility relationships using microcosm communities constructed from spatial niche specialist genotypes of the bacterium Pseudomonas fluorescens. The primary mechanism driving these relationships was a dominance (or selection) effect: more diverse communities were more likely to contain the most productive and least invasible type. Statistical elimination of the dominance effect greatly weakened the diversity–invasibility relationship and eliminated the diversity–productivity relationship, but also revealed the operation of additional mechanisms (niche complementarity, positive and negative interactions) for particular combinations of niche specialists. However, these mechanisms differed for invasibility and productivity responses, resulting in the invasibility–productivity relationship changing from strongly negative to weakly positive. In the absence of the dominance effect, which may be an experimental artefact, decreasing diversity can have unexpected or no effects on ecosystem properties.