Photosynthetic O2 evolution by the upper littoral lichen, Lichina pygmaea (Lightf.) C.Ag., under light-saturated conditions at 5 °C is saturated by the 2 mol m−3 inorganic C found in seawater at pH 8.0. Photosynthesis is not reduced when pH is increased to pH 9.4, and is slightly reduced at pH 10.0, when submersed in seawater with 2 mol m−3 inorganic C. The rate of photosynthesis at pH 10 greatly exceeds the rate of uncatalysed conversion of HCO3−. It is concluded that HCO3− is used in photosynthesis. Since extracellular carbonic anhydrase is present, it is possible that CO2 enters the photobiont (Calothrix) cells even during HCO3 use. pH drift experiments support the notion of HCO3− use. Emersed photosynthesis at 5 °C is more than half-saturated by 35 Pa (normal atmospheric) CO2; the light- and CO2-saturated emersed photosynthetic rate is not significantly different from the light and inorganic C-saturated photosynthetic rate when submersed. Inorganic C diffusion from the thallus surface to the photobiont needs, at least under some conditions, carbonic anhydrase activity which permits HCO3− fluxes to supplement CO2 movement. The CO2 compensation partial pressure at 5 °C is 0.83 Pa, i.e. at the low range of values found for terrestrial cyanobacterial lichens. Dark 14C-inorganic C assimilation when submersed is a small fraction of the dark respiratory rate, consistent with the observed absence of diel CAM-like variation in intracellular titratable acidity. The high value (−11.5%) of δ13C, the low CO2 compensation partial pressure, and the relatively high affinity for inorganic C., are consistent with the operation of an inorganic C concentrating mechanism such as occurs in free-living cyanobacteria and probably occurs in terrestrial cyanobacterial lichens and in most intertidal algae.