The fruticose lichen Stereocaulon vesuvianum is among the most abundant and widespread lichens in upland Britain. It typically produces cephalodia (nodules) that contain the cyanobacterium Stigonema, which can fix atmospheric nitrogen. However, over much of England, Wales, and southern Scotland S. vesuvianum no longer produces cephalodia and does not fix nitrogen, a morphological change linked to elevated atmospheric nitrogen deposition. This provided a unique opportunity to compare the 15N natural abundance signatures in N2-fixing and non-N2-fixing lichen populations, keeping in mind that fixed nitrogen has a 15N content close to that of atmospheric N2 while, in comparison, several components of atmospheric combined N (e.g. nitrate and ammonium in precipitation) tend to be 15N depleted. We found that in N2-fixing samples, there was a steep gradient in 15N relative abundance in the terminal 15 mm of thallus branches (pseudopodetia), changing from 15N depleted tissues at 10-15 mm below the tips to values close to that of atmospheric N2 at the apices while in non-N2-fixing samples thallus branches were uniformly 15N depleted. The 15N gradient in N2-fixing material could not be explained by the presence of cephalodia since these are more abundant towards branch bases. The data provide the first evidence in lichens of translocation of recently fixed N to sink regions of active growth and production of asexual reproductive propagules, bringing lichens into line with N source-sink relationships in N2-fixing plant symbioses.