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Although the effects of invasive alien plants on natural ecosystems are well known, the effects of specific plant species can vary across habitat types and disturbance intensity. This study was carried out to analyze the effects of <i>Lantana camara</i> on associated vegetation and soil physico-chemical properties at invaded and non-invaded sites across three different habitat types (forest edge, fallow land, and roadside) in central Nepal. We sampled 50 pairs of 5 m × 5 m (for shrub species) and 1 m × 1 m (for herbs species) plots at invaded and non-invaded sites in each habitat and recorded community variables for each species within the sampling plots for both wet (monsoon) and dry (pre-monsoon) seasons. Further, we collected soil samples from each quadrat and determined the soil physico-chemical properties. We recorded 137 species of flowering plants (119 from non-invaded and 97 from invaded plots) and classified them in accordance with life form/habit. In invaded sites, we found a significant decline in species diversity as indicated by the Simpson and Shannon diversity indices. Specifically, <i>L. camara</i> reduced the species richness, Simpson index, and Shannon diversity index by 36.84%, 11.84%, and 40.21%, respectively. Soil nutrients such as total nitrogen, soil organic carbon, and available phosphorus were significantly higher in invaded sites than non-invaded ones except for available potassium and soil pH. This study provided evidence that <i>Lantana L. camara</i> has a substantial impact on the understory plant community assemblage and the physico-chemical properties of soil. The results suggest that the protection of native plant community requires management of L. camara by implementing appropriate measures.