Submerged macrophytes enhance water transparency and aquatic biodiversity in shallow water ecosystems. Therefore, the return of submerged macrophytes is the target of many lake restoration projects. However, at present, north-western European aquatic ecosystems are increasingly invaded by omnivorous exotic crayfish. We hypothesize that invasive crayfish pose a novel constraint on the regeneration of submerged macrophytes in restored lakes and may jeopardize restoration efforts. We experimentally investigated whether the invasive crayfish (Procambarus clarkii Girard) affects submerged macrophyte development in a Dutch peat lake where these crayfish are expanding rapidly. Seemingly favourable abiotic conditions for macrophyte growth existed in two 0.5 ha lake enclosures, which provided shelter and reduced turbidity, and in one lake enclosure iron was added to reduce internal nutrient loading, but macrophytes did not emerge. We transplanted three submerged macrophyte species in a full factorial exclosure experiment, where we separated the effect of crayfish from large vertebrates using different mesh sizes combined with a caging treatment stocked with crayfish only. The three transplanted macrophytes grew rapidly when protected from grazing in both lake enclosures, demonstrating that abiotic conditions for growth were suitable. Crayfish strongly reduced biomass and survival of all three macrophyte species while waterfowl and fish had no additive effects. Gut contents showed that crayfish were mostly carnivorous, but also consumed macrophytes. We show that P. clarkii strongly inhibit macrophyte development once favourable abiotic conditions for macrophyte growth are restored. Therefore, expansion of invasive crayfish poses a novel threat to the restoration of shallow water bodies in north-western Europe. Prevention of introduction and spread of crayfish is urgent, as management of invasive crayfish populations is very difficult.