Viable diapausing eggs of Daphnia exilis, a species within the Daphnia similis species complex, occur in sediments of Onondaga Lake, New York. The discovery of this species, which otherwise occurs exclusively in temporary saline ponds in southwestern North America, represents a range extension of 1,000 km. 210Pb-dating of the sediments containing diapausing eggs indicates that D. exilis was present in Onondaga Lake between the mid-1920s and the early 1980s. The species' introduction, successful colonization, and subsequent disappearance from the water column correspond temporally with distinct events in the history of industrial activity along the shores of the lake and with the paleoecological record of this activity deposited in Onondaga Lake sediments. Only the most recently deposited diapausing eggs (late 1970s to early 1980s) hatch during laboratory incubation; older eggs may not be viable because of toxic concentrations of mercury pollution in older sediments. The D. exilis eggs that have hatched have had strikingly low genetic (allozyme) variation in comparison with the variation documented for populations in the southwestern United States by Hebert and Finston (1993). Exploration of various invasion scenarios through simulated introduction of genotypes from the southwestern United States suggests that a single genotype established the D. exilis population in Onondaga Lake. These observations document the ecological and microevolutionary patterns associated with an invasion by an exotic crustacean that currently persists only in the sediment egg bank.