Urban estuaries are important socio-ecological systems, and often the focus of coastal management and conservation. They support estuarine habitat-formers including oysters, mangroves and seagrass which facilitate vital ecological functions such as fish production, biofiltration and coastal protection. However, anthropogenic stressors such as invasive species pose significant challenges to maintaining estuary functions and biodiversity. So what happens when estuaries are invaded by the world’s most invasive oyster species? Pacific oysters (Magallana gigas) have been globally translocated for aquaculture production and can establish novel oyster reefs, posing a biosecurity and ecological management challenge. In South Australia’s Port River-Barker Inlet Estuary, Pacific oysters form dense aggregations, particularly in fringing mangrove forests, possibly altering ecological communities and functions. We assessed intertidal habitats to investigate how Pacific oysters are influencing fish and invertebrate communities using RUVs, nets, and extractive quadrats. Our results show that novel oyster reefs support elevated biodiversity and fish habitat value. However, oysters also alter mangrove-associated communities and provided habitat for several non-native species. These outcomes highlight some of the ecological pros and cons of non-native shellfish reefs, and the complexity of managing urban estuaries where the co-occurrence of Pacific oysters and native habitat-formers is globally increasing.