The effect of water content on photosynthetic and respiratory rates in eight lichen species and one bryophyte species were studied using an injection infrared gas analyser technique. All species snowed a strong relationship between net assimilation rate (NAR), respiration rate, and water content similar to relationships reported in published studies overseas. Species from moist habitats showed negative NAR at low water contents. Species from high-light areas showed a depression in NAR at high water contents which could be alleviated by higher light intensities. The experiments confirmed the suitability of New Zealand species for these studies.