The pattern of gas exchange in response to changing levels of thallus hydration is presented for several lichen species, together with the effects of high or low CO2 levels on net photosynthesis. The data shows that there is no discernible generalized relationship. Some species achieve very high optimum rates of net photosynthesis at full thallus hydration, while other species have optimum rates at lower levels of thallus hydration with CO2 diffusive resistance either remaining high or decreasing to a minimum coincident with the photosynthetic optimum. Where the diffusive resistance remains high, the phycobiont appears to be continuously CO2 limited even at optimum levels of thallus hydration. There can also be a strong interaction between temperature and the pattern of the CO2 limitation curve due to the high rate of respiration at full thallus moisture and a high thallus temperature. It is concluded that the discrete infra red gas analyser sampling method will slightly underestimate net photosynthetic rates in some species, particularly at full thallus water content, but the same errors will also be equally inherent in flow systems. Accordingly the traditional flow system without the replication advantages of the discrete sampling system, has little to recommend it for comparative seasonal or ecological work. The traditional correlation between the mesic requirements of a lichen and its net photosynthetic response pattern to the degree of thallus hydration is also questioned.