Light availability varies strongly among moss habitats and within the moss canopy, and vertical variation in light within the canopy further interacts with the age gradient. The interacting controls by habitat and canopy light gradient and senescence have not been studied extensively. We measured light profiles, chlorophyll (Chl), carotenoid (Car) and nitrogen (N) concentrations, and photosynthetic electron transport capacity (Jmax) along habitat and canopy light gradients in the widespread, temperate moss Pleurozium schreberi to separate sources of variation in moss chemical and physiological traits. We hypothesised that this species, like typical feather mosses with both apical and lateral growth, exhibits greater plasticity in the canopy than between habitats due to deeper within-canopy light gradients. For the among-habitat light gradient, Chl, Chl/N and Chl/Car ratio increased with decreasing light availability, indicating enhanced light harvesting in lower light and higher capacity for photoprotection in higher light. N and Jmax were independent of habitat light availability. Within the upper canopy, until 50–60% above-canopy light, changes in moss chemistry and photosynthetic characteristics were analogous to patterns observed for the between-habitat light gradient. In contrast, deeper canopy layers reflected senescence of moss shoots, with pigment and nitrogen concentrations and photosynthetic capacity decreasing with light availability. Thus, variation in chemical and physiological traits within the moss canopy is a balance between acclimation and senescence. This study demonstrates extensive light-dependent variation in moss photosynthetic traits, but also that between-habitat and within-canopy light gradient affects moss physiology and chemistry differently.