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Questions: Does the non‐native evergreen Chinese windmill palm (Trachycarpus fortunei) affect native plant community and forest regeneration in deciduous forests? Are effects modulated by soil moisture? What are the implications for forest management and nature conservation? Location: Broadleaved deciduous low‐elevation forests on the southern slope of the Alps across the Swiss–Italian border region. Methods: We compared the native herbaceous and woody plant composition, species richness, Shannon diversity and abundance at ten deciduous forest sites on two moisture conditions (six mesic–moist sites and four mesic–dry sites). Each site consisted of three plots measuring 400 m2 along a gradient of T. fortunei presence, ranging from "dominant", to "present but not dominant" to "absent". Results: In mesic–moist forests with high densities of T. fortunei, species richness and Shannon diversity of native plants and recruiting woody species in the herb and shrub layers were significantly reduced compared to similar sites where T. fortunei is absent or not dominant. However, in mesic–dry forests these variables did not differ between palm‐invaded and uninvaded plots. The abundance of recruiting woody individuals did not differ between plots invaded by palms and uninvaded control plots in either forest type. Conclusions: We expect detrimental consequences for plant diversity in mesic–moist alluvial forests with high T. fortunei densities and few detrimental consequences in the more widespread non‐alluvial forests. We recommend multifaceted management, including targeted eradication in alluvial forests identified as hotspots of native plant diversity, accompanied by hands‐off management of T. fortunei in non‐alluvial forests, recognizing the ongoing and inevitable "laurophyllisation"; a biome shift toward mixed‐evergreen forest that may increase ecosystem climate resilience under ongoing climatic warming. [ABSTRACT FROM AUTHOR]