Free-living and symbiotic phycobionts of Anthoceros punctatus and Blasia pusilla reduce acetylene and fix 15N2; gametophytes and sporophytes without algae do not. Nitrogenase activity by free-living and symbiotic Nostoc is higher under microaerobic than aerobic conditions in the light, and is higher in the light than in the dark. The free-living Blasia phycobiont grows heterotrophically on sucrose and less well on fructose and glucose; hetero-trophic growth on galactose is negligible. There is a transfer of 15N from the alga, via the gametophyte to the sporophyte of Anthoceros. About 98% of the extracellular nitrogen liberated into the medium by excised Nostoc colonies is in the form of ammonia; there is negligible liberation of peptides and amino acids. The capacity to excrete ammonia is lost after 72 h of growth free from the liverwort. Excised Nostoc colonies show a negligible capacity to fix CO2 photosynthetically and autoradiographic studies show a transfer of fixed carbon from Blasia gametophytes to the algal cavities. Sucrose may be the main extracellular carbon compound liberated by Blasia gametophytes. In Anthoceros, nitrogenase activity can be sustained for days when alga-containing gametophytes are placed in the dark, if the sporophytes remain exposed to the light. This indicates a transfer of photosynthate from the sporophyte, via the gametophyte, to the alga.