In the main features of their carbon metabolism and physiological responses, bryophytes behave as normal C:)plants. However, their small size and frequent poikilohydric habit have important effects on the context in which these characteristics are expressed, and on their environmental physiology. Many are tolerant of drying out to low water contents(c.5–10%, of dry weight). Photosynthesis declines rapidly with water loss, and resumes with greater or lesser delay on remoistening. The rate and completeness of recovery depend on the intensity and duration of desiccation, and on drought‐hardening (perhaps largely related to protection of cell components from oxidative damage) which lakes place as the bryophyte dries. Most bryophytes, including species of well‐illuminated habitats, function in effect as shade plants, with low chlorophyll a/b ratios, and become light‐saturated at relatively low irradiance. Boundary‐layer resistance is critically important in determining water loss from bryophytes in many situations. The time for which a poikilohydric species can photosynthesize after rain is determined by storage capacity and rate of water loss, both strongly influenced by growth‐form. In sheltered habitats with extensive bryophyte cover water loss is largely determined by radiation balance, and may be very slow in deeply shaded places. Bryophyte growth‐forms must represent an adaptive balance between water economy and needs for light capture and carbon and mineral nutrien