Rates of net photosynthesis and nocturnal respiration by individual blades of the giant kelp Macrocystis pyrifera (L.) C. Agardh in southern California, were determined in situ by measuring oxygen production in polyethylene bags during spring/summer of 1983. Mature blades from different depths in the water column exhibited different photosynthetic characteristics. Blades from the surface canopy (0 to 1 m depth) exhibited higher photosynthetic capacity under saturating irradiance and higher photosynthetic efficiency at low irradiances than blades from 3 to 5 or 7 to 9 m depths. Saturating irradiance was lower for canopy blades than for deeper blades. Canopy blades showed no short-term photoinhibition, but photosynthetic rates of deeper blades were significantly reduced during 1 to 2 h incubations at high irradiances. Results of 1 to 2 wk acclimation experiments indicated that differences between photosynthetic characteristics of blades from different depths were primarily attributable to acclimation light conditions. Vertical displacement of blades within the kelp canopy occurred on a time-scale of 1 min to 1 h. Blades continually moved between the unshaded surface layer and deeper, shaded layers. Vertical movement did not maximize photosynthesis by individual blades; only a small proportion of blades making up a dense surface canopy maintained light-saturated photosynthetic rates during midday incubations. The relatively high photosynthetic rates exhibited by canopy blades over the entire range of light conditions probably resulted from acclimation to intermittent high and low irradiances, a consequence of vertical displacement. Vertical displacement also reduced the afternoon depression in photosynthesis of individual canopy blades. The overall effect of vertical displacement was optimization of total net photosynthesis by the kelp canopy and, therefore, optimization of whole-plant production.