Shallow freshwater wetlands that are permanently inundated are prone to developing dense mats of highly-competitive clonal species. We examine vegetation pattern and change in a tropical impoundment (Fogg Dam) in northern Australia in the context of succession towards vegetation closure with adverse implications for biodiversity and tourism. The area of open water declined 44 % between 1993 and 2005. Closed vegetation comprised a floating mat complex featuring a stoloniferous grass, ferns and young trees, and a sedgeland rooted in the soft sediment layer comprising monodominant circular patches of the rhizomatous Eleocharis sphacelata. Depth to the underlying firm substrate varied little between the closed vegetation types and between them and the remaining open water, but the soft sediment layer was markedly deeper under sedgeland and it contained much coarse plant matter consisting mainly of dead Eleocharis. This suggests that E. sphacelata may be creating its environment in order to invade areas of deeper water. Although other wetland plants create more favourable environments for themselves by accreting sediment and/or modifying soil chemistry, this may be the first report of an invasive species modifying depth using its own plant matter. At Fogg Dam, encroachment of closed vegetation into open water areas is not limited by depth and will likely result in the entire wetland being closed over within a decade. To restore diversity, an adaptive disturbance regime is required, some options for which are briefly discussed.