Diverse hypotheses have been proposed to explain the low diversity and abundance of lichens in large cities, including high nitrogen pollution and the heat-island effect. Furthermore, it remains unclear which partner, the mycobiont or the photobiont, is more affected by these stresses that limit lichen survival. This study aimed to explore how nitrogen pollution and xeric conditions affect lichen photobionts. Photobionts from 25 lichen species in seminatural and urban areas of Madrid (Spain) were identified by amplifying the nrITS barcode region. Sixteen species-level strains were detected, including 6 new species-level lineages. Four photobiont strains were selected for physiological experiments based on their hosts' environmental preferences: Trebouxia A74, found only in urban lichens; T. jamesii, found only in semi-natural environments; and T. I01 and T. gigantea, found in both environments. These strains were cultured in vitro, and their photosynthetic activity was monitored under varying concentrations of KNO₃ and (NH₄)₂SO₄ for 12 weeks, with biomass quantified at the end of the experiment. Additionally, the photosynthesis response to long-term desiccation was analysed over 15 months. T. jamesii was negatively affected by exposure to nitrogen compounds and desiccation. In contrast, low concentrations of ammonium and nitrate stimulated growth in the other species, especially in T. A74, while desiccation even improved the photosynthetic performance of T. I01 and T. gigantea. These findings demonstrate that different Trebouxia phycobionts exhibit distinct species-specific physiological traits that may influence their lichen hosts' ability to survive in urban environments. Keywords Chlorophyll fluorescence · Desiccation-tolerance · Lichen · Osmotic stress · Photobiont diversity · Trebouxia.