Theories linking diversity to ecosystem function have been challenged by the widespread observation of more exotic species in more diverse native communities. Few studies have addressed the underlying processes by dissecting how biotic resistance to new invaders may be shaped by the same environmental influences that determine diversity and other community properties. In grasslands with heterogeneous soils, we added invaders and removed competitors to analyze the causes of invasion resistance. Abiotic resistance was measured using invader success in the absence of the resident community. Biotic resistance was measured as the reduction in invader success in the presence of the resident community. Invaders were most successful where biotic resistance was lowest and abiotic resistance was highest, confirming the dominant role of biotic resistance. Contrary to theory, though, biotic resistance was highest where both species richness and functional diversity were lowest. In the multivariate framework of a structural equation model, biotic resistance was independent of community diversity, and was highest where fertile soils led to high community biomass. Seed predation slightly augmented biotic resistance without qualitatively changing the results. Soil-related genotypic variation in the invader also did not affect the results. We conclude that in natural systems, diversity may be correlated with invasibility and yet have little effect on biotic resistance to invasion. More generally, the environmental causes of variation in diversity should be considered when examining the potential functional consequences of diversity.