Under field conditions of optimal water hydration, lichen photosynthesis is primarily light-limited and nitrogen fixation is temperature-limited in both Peltigera canina and Stereocaulon tomentosum at Anaktuvuk Pass, Alaska. Thus, where duration of optimal hydration conditions remains unchanged from the present-day climate, the anticipated temperature increases in the Arctic may enhance nitrogen fixation in these lichens more than carbon gain. Because nitrogen frequently limits productivity in Arctic ecosystems, the results are potentially important to the many Arctic and subarctic ecosystems in which such lichens are abundant.