1. Climate change is driving a redistribution of species and reconfiguration of ecological communities at a global scale. Persistent warming in many regions has caused species to extend their geographical ranges into new habitats, with thermally-tolerant species often becoming competitively dominant over species with colder affinities. Although these climate-driven changes in species abundance and diversity are well documented, their ecosystem-level implications are poorly understood, and resolving whether reconfigured communities can maintain fundamental ecosystem functions represents a pressing challenge in an increasingly warmer world. 2. Here, we investigated how climate-driven substitutions of foundation species influence processes associated with carbon and nutrient cycling (biomass production, detritus flow, herbivory, decomposition) by comparing two habitat-forming kelp species with contrasting thermal affinities. We examined the wider consequences of the observed (and predicted) emergence of novel marine forests in the NE Atlantic, which are expected to become more dominated by range-expanding, warm-temperate kelps. 3. Warm-temperate kelps both accumulated and released 80% more biomass than the cold-temperate species despite being taxonomically closely-related and morphologically similar. Furthermore, the warm-temperate species accumulated biomass and released detritus year-round, whereas the cold-temperate species did so during short, discrete periods. The warm-temperate kelps supported higher densities of invertebrate grazers and were a preferred food source. Finally, their detritus decomposed 6.5 times faster, despite supporting comparable numbers of detritivores. Overall, our results indicate an important shift in the cycling of organic matter in kelp forests along parts of the NE Atlantic coastline following climate-driven expansion of a warm-affinity kelp, with novel forests supplying large amounts of temporally-continuous—yet highly labile—organic matter. 4. Synthesis. Collectively, our results show that, like species invasions, climate-driven range expansions and consequent shifts in the identity of dominant species can modify a wide range of important ecosystem processes. However, alterations in overall ecosystem functioning may be relatively limited where foundation species share similar ecological and functional traits.