In this article we initiate research on locally compact C*-simple groups. We first show that every C*-simple group must be totally disconnected. Then we study C*-algebras and von Neumann algebras associated with certain groups acting on trees. After formulating a locally compact analogue of Powers' property, we prove that the reduced group C*-algebra of such groups is simple. This is the first simplicity result for C*-algebras of non-discrete groups and answers a question of de la Harpe. We also consider group von Neumann algebras of certain non-discrete groups acting on trees. We prove factoriality, determine their type and show non-amenability. We end the article by giving natural examples of groups satisfying the hypotheses of our work.