Nitrogenase activity in the surface soil and litter layers from a tropical lowland rain forest and an adjacent fernland in Sri Lanka was measured by the acetylene reduction method. The total amount of acetylene reduced, a measure of biological nitrogen fixation, was greater in the fernland (38.4 µmol m−2 h−1) than in the forest (15.3–29.2 µmol m−2 h−1). In both ecosystems the nitrogenase activity was greater (59–85%) in the soil than in the litter layer. The rates of acetylene reduction in soil and litter showed an inverse relationship with the decay constants of mixed litter and a positive relationship was found between the rate of acetylene reduction and the C:extractable nitrogen ratio of the soil. The relatively greater rate of nitro genase activity coupled with the slower rate of litter decomposition in the fernland indicates that accumulation of nitrogen may result in the soil and litter layers of the deforested areas during their aggrading phases.