The Tabernas badlands in semiarid south-east Spain is one of the driest regions in Europe with a mean annual precipitation of c. 240 mm. The landscape is deeply dissected, with canyons, ramblas and sparsely vegetated eroded badland slopes. The vegetation is predominantly a biological soil crust consisting of different types of lichen-rich communities, one of the more conspicuous being dominated by Diploschistes diacapsis (Ach.) Lumbsch. This lichen is mainly restricted to the north- facing slopes, where it forms extensive whitish carpets and probably plays an important role in preventing erosion of the slopes and allowing plant colonization. South-facing slopes are much more eroded and generally lack vegetation. %The photosynthetic performance of north (shade) and south-facing (sun) populations of D. diacapsis was studied to determine if these different populations showed any adaptations to the microclimatic conditions of their individual habitats. The response of CO2 exchange to light intensity, temperature and water content was measured under controlled conditions in the laboratory. Dry weight-based net photosynthetic rates were higher in the southern-exposed population but quantum efficiency, and light compensation points were similar. Thallus weight per unit area (LMA) was considerably higher for shade specimens but maximum water content and optimal water content were very similar and chlorophyll content on a dry weight basis was also similar. Chlorophyll content on an area basis was higher in the northern-exposed population and always much larger than those reported in other studies on the same species (up to 8 times larger) with the result that NP values on a chlorophyll basis were relatively low. The larger LMA meant that shade thalli stored more water per unit area which should ensure longer active periods than sun thalli. The results support a strategy pair of high NP and short active time versus low NP and long active time, both having been reported for other soil crust species. However, the visibly larger biomass of the shade D. diacapsis suggests that the lichen is at the limit of its adaptability in these habitats.