Despite growing recognition of the importance of ecosystem services and the economic and ecological harm caused by invasive species, linkages between invasions, changes in ecosystem functioning, and in turn, provisioning of ecosystem services remain poorly documented and poorly understood. We evaluate the economic impacts of an invasion that cascaded through a food web to cause substantial declines in water clarity, a valued ecosystem service. The predatory zooplankton, the spiny water flea (Bythotrephes longimanus), invaded the Laurentian Great Lakes in the 1980s and has subsequently undergone secondary spread to inland lakes, including Lake Mendota (Wisconsin), in 2009. In Lake Mendota, Bythotrephes has reached unparalleled densities compared with in other lakes, decreasing biomass of the grazer Daphnia pulicaria and causing a decline in water clarity of nearly 1 m. Time series modeling revealed that the loss in water clarity, valued at US$140 million (US$640 per household), could be reversed by a 71% reduction in phosphorus loading. A phosphorus reduction of this magnitude is estimated to cost between US$86.5 million and US$163 million (US$430–US$810 per household). Estimates of the economic effects of Great Lakes invasive species may increase considerably if cases of secondary invasions into inland lakes, such as Lake Mendota, are included. Furthermore, such extreme cases of economic damages call for increased investment in the prevention and control of invasive species to better maximize the economic benefits of such programs. Our results highlight the need to more fully incorporate ecosystem services into our analysis of invasive species impacts, management, and public policy.