Plant invasion can affect nutrient cycling by changing the quantity and quality of litter entering the environment. To determine the effect of an alien species (Spartina alterniflora) invasion on the decomposition rates and nutrient dynamics of litter in the Min River estuary, three communities with differing levels of invasion, namely, a Cyperus malaccensis community (before invasion, BI stage), a S. alterniflora community (after invasion, AI stage), and a C. malaccensis–S. alterniflora community (during invasion, DI stage), were studied using the space-for-time substitution method. Results showed that the decomposition of C. malaccensis was 59.79% faster than that of S. alterniflora, which was mainly related to the great variations in the C/N and lignin. Compared with S. alterniflora, the N (nitrogen) and S (sulfur) concentrations of litter in C. malaccensis were significantly higher. The C, N, and S stocks increased as the C. malaccensis was being invaded or after complete invasion by S. alterniflora, which might be ascribed to the higher mass remaining in S. alterniflora. Compared with S. alterniflora in DI stage, the higher C/N and C/S ratios might explain the higher C, N, and S stocks in S. alterniflora in AI stage. In summary, the invasion of S. alterniflora reduces the decomposition rate and nutrient release of litter.