Fluorescence characteristics and growth of seedling snow gum (Eucalyptus pauciflora Sieb. ex Spreng.) during autumn and winter were related to variation in radiation and temperature regime in a fragmented forest. Seedlings were planted in four treatments along transects perpendicular to tree island edges to characterize plant responses to microclimates ranging from those of cleared areas to those beneath forest canopies. Three-dimensional mapping of seedling leaf display, in combination with information retrieved from hemispherical photographs about shading from overstory canopies, were used to calculate the intercepted amounts of direct radiation energy for unit area of leaves on clear days (IDRE). IDRE was highest on the outside, most variable at the edges and lowest well inside the tree islands. Minimum temperature decreased with increasing view of the sky. Photoinhibition, measured as decrease in Fv/Fm, was correlated with spatial and seasonal differences in weekly minimum temperature and IDRE. Seedlings in the open and under the most canopy cover, with low variability in IDRE in a scale of weeks, exhibited less variability in photoinhibition than those growing along forest edges. Seedlings in the open tended to be most photoinhibited and grew the most. The combination of increased IDRE with reduced minimum temperatures resulted in persistent and strong photoinhibition as the season progressed. Results are discussed in relation to the potential for seedling establishment following forest fragmentation.