Lobaria oregana (lettuce lung lichen) is an abundant nitrogen-fixing cyanolichen in old-growth Douglas-fir [Pseudotsuga menziesii] forests of the Pacific Northwest (USA). In this study, we used the Wind River Canopy Crane Research Facility in the southern Washington Cascades, to study nitrogenase activity, photosynthesis, and growth to clarify the potential for Lobaria to contribute fixed nitrogen to these forests and to better understand the ecological factors that determine the distribution of Lobaria. Pendants of Lobaria were placed at three positions in the canopy: top (62 m above the ground), middle (39 m), and bottom (2 m). There was a complex pattern of seasonal and spatial variation. Highest growth was found at the middle position where there was a 19.3% increase in dry weight over the 13-month study period. Lichens at the bottom position died after transplanting. Nitrogenase activity was consistently higher in the middle position and averaged 115 nmol C2H4 g-1 h-1 for wet season measurements (February, March, and November) with a range of 0-310 nmol C2H4 g-1 h-1. Photosynthesis activity averaged 0.322 mg CO2 g-1 h-1 for the wet season with a range of 0-0.801 mg CO2 g-1 h-1. Activities were strongly correlated with hydration except that hydration >200% inhibited photosynthesis. Laboratory experiments showed that photosynthesis increased at photosynthetic photon flux densities of up to 1000 micro mol m-2 s-1. This study supports the conclusion that Lobaria is a source of nitrogen input for these forests and addresses how the physiological activities of Lobaria respond both spatially and temporally to the extremely variable environment within the canopy.