There is a striking increase in the abundance of non-vascular organisms (mosses, liverworts, and macrolichens) with altitude in the tropics. The proposed mechanism behind this altitudinal gradient still awaits experimental verification. This study addresses this question using diel (= 24-h) time courses of CO2 exchange, thallus water relations, and microclimate of the foliose lichen, Parmotrema endosulphureum, under natural tropical lowland conditions. In addition, we studied the responses of lichen gas exchange to experimental manipulations of incident light, temperature and thallus water content. Similar to the results of the only other field study on CO2 exchange in lowland lichens, 24-h carbon gain was strongly limited by nocturnal CO2 loss : the cumulative dark respiration reached almost 90% of diurnal carbon gain. Our estimates of long-term carbon gain are consistent with direct measurements of growth, and are substantially lower than those for lichens from montane sites in the tropics. Key words: Barro Colorado Island, dark respiration, lichens, photosynthesis, tropical forests, water content