The native tree Cryptomeria japonica (cedar) is found as a dominant in many natural forests but has also been introduced for timber use throughout Japan. Because of its basal area dominance, C. japonica has potential to act as an ecosystem engineer. We investigated how the basal dominance of Japanese cedar influences overall forest structure, functional diversity, and the prevalence of disturbances, in both natural forest and plantation plots. Two datasets were combined: 1) the Japanese National Forest Inventory (NFI), and 2) functional trait data on five traits (height, leaf mass per area, wood density, seed mass, and leaf size) for 250 tree species and varieties. The NFI data are based on thousands of circular plots set up at 4-km grid intervals systematically across Japan, and include information on species composition and tree size, as well as disturbance responses for forest types classified as either natural or plantations. In our analysis, we only considered plots with C. japonica presence and used plantation plots with a C. japonica relative basal area of 80% or more; these restrictions resulted in a range of 0.03-100% relative basal area across 1394 plantations and 183 natural forests. Natural forests had greater species richness and averaged 27% dominance while plantations averaged 94% dominance. Natural forests also were more likely to experience deer damage, and less likely snow damage (wind damage not significant). In principal components analysis, C. japonica occupies a quite unique position in trait space, even among gymnosperms, characterized as a very tall species with low wood density, high leaf mass per area, small leaf size, and small seeds—and these trait values become even more pronounced in plantation plots. Because of its functional profile, C. japonica relative basal area is negatively correlated with species richness, Rao’s Q, functional richness, functional evenness, and functional dispersion, and positively correlated with functional divergence. As the relative basal area of C. japonica increases, there is also an increased probability of snow damage and a lower probability of deer damage. High dominance of C. japonica therefore not only affects species biodiversity patterns but has strong functional effects within forest communities and ecosystem processes, including subcanopy light availability and litter production. As forestry professionals consider long-term viability of plantations and debate the balance between production forestry and natural forests, the structural and functional role of C. japonica should also be considered.