Abstract.In this review we relate the physiological significance of C4photosynthesis to plant performance in nature. We begin with an examination of the physiological consequences of the C4pathway on photosynthesis, then discuss the ecophysiological performance of C4plants in contrasting environments. We then compare the performance of C3and C4plants when they occur together in similar habitats, and finally discuss the distribution of C4photosynthesis with respect to the physical environment, phylogeny, and life form.