Long-term exposure to CO2-enriched waters can considerably alter marine biological community development, often resulting in simplified systems dominated by turf algae that possess reduced biodiversity and low ecological complexity. Current understanding of the underlying processes by which ocean acidification alters biological community development and stability remains limited, making the management of such shifts problematic. Here, we deployed recruitment tiles in reference (pHT 8.137 ± 0.056 SD) and CO2-enriched conditions (pHT 7.788 ± 0.105 SD) at a volcanic CO2 seep in Japan in order to assess the underlying processes and patterns of algal community development. We assessed (i) algal community succession in two different seasons (Cooler months: January–July, and warmer months: July–January), (ii) the effects of initial community composition on subsequent community succession (by reciprocally transplanting pre-established communities for a further six months), and (iii) the community production of the resulting communities, in order to assess how their functioning is altered (following 12 months recruitment). Settlement tiles became dominated by turf algae under CO2-enrichment and had lower biomass, diversity and complexity, a pattern consistent across seasons, which locked the community in a species-poor early successional stage. In terms of community functioning, the elevated pCO2 community exhibited greater net community production, and yet this apparent boost did not result in increased algal community cover, biomass, biodiversity or structural complexity. Taken together, this shows that both new and established communities become simplified with rising CO2 levels. Our transplant of pre-established communities from enriched-CO2 to reference conditions demonstrated their high resilience, since they became indistinguishable from communities maintained entirely in reference conditions. This shows that meaningful reductions in pCO2 will enable the recovery of algal communities. By understanding the ecological processes responsible for driving shifts in community composition, we can better assess how communities are likely to be altered by ocean acidification.