The invasive rust Puccinia psidii (myrtle rust) was detected in Australia in 2010 and is now established along the east coast from southern New South Wales to far north Queensland. Prior to reaching Australia, severe damage from P. psidii was mainly restricted to exotic eucalypt plantations in South America, guava plantations in Brazil, allspice plantations in Jamaica, and exotic Myrtaceous tree species in the USA; the only previous record of widespread damage in native environments is of endangered Eugenia koolauensis in Hawai’i. Using two rainforest tree species as indicators of the impact of P. psidii, we report for the first time severe damage to endemic Myrtaceae in native forests in Australia, after only 4 years’ exposure to P. psidii. A 3-year disease exclusion trial in a natural stand of Rhodamnia rubescens unequivocally showed that repeated, severe infection leads to gradual crown loss and ultimately tree mortality; trees were killed in less than 4 years. Significant (p < 0.001) correlations were found between both incidence (r = 0.36) and severity (r = 0.38) of P. psidii and subsequent crown loss (crown transparency). This provided supporting evidence to conclude a causal association between P. psidii and crown loss and tree mortality in our field assessments of R. rubescens and Rhodomyrtus psidioides across their native range. Assessments revealed high levels of damage by P. psidii to immature leaves, shoots and tree crowns—averaging 76 % (R. rubescens) and 95 % (R. psidioides) crown transparency—as well as tree mortality. For R. psidioides, we saw exceptionally high levels of tree mortality, with over half the trees surveyed dead and 40 % of stands with greater than 50 % tree mortality, including two stands where all trees were dead. Tree mortality was less prevalent for R. rubescens, with only 12 % of trees surveyed dead and two sites with greater than 50 % mortality. Any alternative causal agents for this tree mortality have been discounted. The ecological implications of this are unclear, but our work clearly illustrates the potential for P. psidii to negatively affect Australia’s biodiversity.