Local abiotic and biotic conditions can alter the strength of exotic species impacts. To better understand the effects of exotic species on invaded ecosystems and to prioritize management efforts, it is important that exotic species impacts are put in local environmental context. We studied how differences in plant community composition, photosynthetically active radiation (PAR), and available soil N associated with Russian olive presence are conditioned by local environmental variation within a western U.S. riparian ecosystem. In four sites along the South Fork of the Republican River in Colorado, we established 200 pairs of plots (underneath and apart from Russian olive) to measure the effects of invasion across the ecosystem. We used a series of a priori mixed models to identify environmental variables that altered the effects of Russian olive. For all response variables, models that included the interaction of environmental characteristics, such as presence/absence of an existing cottonwood canopy, with the presence/absence of Russian olive canopy were stronger candidate models than those that just included Russian olive canopy presence as a factor. Compared with reference plots outside of Russian olive canopy, plots underneath Russian olive had higher relative exotic cover (exotic/total cover), lower perennial C4 grass cover, and higher perennial forb cover. These effects were reduced, however, in the presence of a cottonwood canopy. As expected, Russian olive was associated with reduced PAR and increased N, but these effects were reduced under cottonwood canopy. Our results demonstrate that local abiotic and biotic environmental factors condition the effects of Russian olive within a heterogeneous riparian ecosystem and suggest that management efforts should be focused in open areas where Russian olive impacts are strongest.