This study of lichen ecological physiology was carried out in four parts: (i) The growth rates of specimens of Pseudocyphellaria homoeophylla and Sticta caperata growing in the Urewera National Park (New Zealand) were measured photographically. The mean radial increase of P. homoeophylla was related to thallus diameter and rates as high 27 mm yr⁻¹ (32 cm diameter) were recorded. The growth of S. caperata was not influenced by thallus size and the mean radial increase was 7.0 mm yr⁻¹. (ii) The intraspecific morphological variations of Pseudocyphellaria dissimilis populations are assessed and are related to the nitrogenase activity and water relations of each population. The effect of thallus water content on CO₂ exchange in eight lichen and one bryophyte species was studied using an infrared gas analyser operating as a discrete sample analyser. Species from moist habitats showed a net loss of CO₂ at low thallus water contents whilst some other species showed a depression of net photosynthesis (NP) at high thallus water contents. In Sticta latifrons this depression was less apparent when the lower surface was dried. Experiments with a split chamber demonstrated that virtually all CO₂ uptake occurs through the lower, cyphellate surface. These results suggest that the cyphellae of S. latifrons act as air pores and that blockage of these pores with water results in a depression of NP. (iii) Low oxygen concentrations (1% v/v) were shown to increase NP in S. latifrons, P. homoeophylla and P. billardierii by up to 55%. This stimulation was considered to result from the repression of photorespiration. The oxygen effect was separated into two components; (a) the sensitivity of the carboxylation system and (b), the rate of CO₂ evolution in the light at zero CO₂. Of the lichen species studied all but P. billardierii had a carboxylation sensitivity typical of the values expected in C3 plants. P. billardierii had an unusually low carboxylation sensitivity. The rate of CO₂ evolution in the light showed large inter and intraspecific variations. Low rates of CO₂ evolution were often associated with a high CO₂ refixation ability. (iv) Total CO₂ diffusion resistance - water content curves for six lichen species are presented. All species show increased resistances at low thallus water contents and some also show high resistances at high thallus water contents. The total CO₂ resistances of S. latifrons and P. amphisticta are separated into transport and carboxylation components. Cyphella, pseudocyphella, and medulla resistances are calculated from morphological data. Although transport resistances are often larger than carboxylation resistances the results suggest that at ambient CO₂ levels carboxylation processes limit photosynthesis. The relationship between resistance to water vapour loss and resistance to CO₂ uptake in P. homoeophylla and S. latifrons is established and the ecological implications are discussed. In a general summary, the size of the internal and external water holding capacities of several lichen species is estimated. The effectiveness of these reserves in maintaining lichens in a moist condition in the field is calculated and the results are related to the ecology of the species. Morphological adaptations of Stictaceae lichens which maximise water holding capacity yet minimise CO₂ diffusion resistances are considered. It is suggested that lichen water contents should be related to thallus area, rather than thallus weight, as the former parameter appears to be of greater physiological significance. The relevance of this work to that of previous authors is discussed, particularly in regard to photorespiration, CO₂ uptake, and thallus water content in lichens.