The effect of day length, night temperatures and photon flux density on the growth and oil yield of the Tasmanian native species,Olearia phlogopappa(Labill.) were examined. High photon flux densities (PFD) resulted in significant increases in plant height, stem diameter and percentage oil yield. In addition, 16 h periods of photosynthetically active radiation increased plant height and percentage dry matter. Infrared gas analysis was used to study the effect of PFD and temperature on carbon dixoide assimilation. Light saturation occurred at 200 to 400 μmol.m−2S−1. Adaptation to low temperatures is evident in that optimum photosynthesis occurs at 15–20°C, but is greater at 5°C than at temperatures above 25°C. First-year leaves have higher rates of assimilation than second-year leaves. This is in agreement with the observation that more essential oil is accumulated in first-year leaves than in second-year leaves.