Although the coastal zone of the Central Namib Desert (Namibia) has negligible rainfall, frequent fog, dew and high air humidity support a luxurious lichen flora. Large areas of soil crust communities are dominated by the multibranched, fruticose Teloschistes capensis interspersed by a (still indeterminable) Ramalina species. In earlier communications, based on field measurements in autumn, we began the analysis of functional mechanisms that allow these lichens to exist under the special conditions of a fog desert. We have extended this work by monitoring lichen CO 2 exchange and water relations in spring and by experiments under controlled conditions. In both seasons, nocturnal hydration, by fog and/or dew, activated dark respiration of the lichens which was followed, after sunrise, by a short period of positive net photosynthesis (NP) that continued until metabolic inactivation occurred from desiccation. Dry thalli of T. capensis were able to reactivate NP through water vapour uptake alone, beginning at an air relative humidity of 82%, i.e. at a water potential of −26.3 MPa; the moisture compensation point during desiccation was at 13% thallus water content (WC, dry weight related). Optimal WC for photosynthesis was around 100%, and both species showed a large and extended suprasaturation depression of CO 2 assimilation. Light response showed “sun-plant” characteristics with saturation >1000 μmol m −2 s −1 photosynthetically active photon flux density (PPFD). However, due to rapid desiccation, the combination of light saturation with optimal WC very rarely occurred under field conditions. Light compensation point after sunrise was highly dependent on actual WC: at low hydration, it amounted to only ca. 10 μmol m −2 s −1 PPFD so that even the smallest levels of hydration could be used for carbon gain before desiccation took place again. This phenomenon was probably due to a hydration gradient in the thallus branches during transient moistening so that the outer photobiont layer was favoured in contrast to the internal mycobiont which remained dry longer and did not contribute respiratory CO 2 loss. Fully hydrated thalli had light compensation points around 50 μmol m −2 s −1 PPFD. Extended desiccation of 1–3 days had no impact on the magnitude and recovery of photosynthesis but, imposed desiccation of 10 days reduced NP in lab and field experiments and caused an extended period of recovery. “Resaturation respiration” was not detected in the field data, although it was present after experimental moistening of dry thalli. In spring, the higher fog frequency and intensity increased maximal nocturnal WC, maximal attained NP as well as integrated daily carbon income (ΣNP) compared to the autumn measurements. NP max and ΣNP depended on maximal nocturnal WC with a saturation-type response. In terms of carbon gain both species seem to be optimally adapted to nocturnal moistening up to 160% WC and were not able to make use of higher degrees of hydration, a feature that might well influence their habitat selection. Maximal daily carbon-related ΣNP for T. capensis was 4.6 mg C (g C) −1 day −1. A rough estimate of the annual (projected) area-related carbon balance (photosynthetic income minus respiratory losses) based on published fog and dew frequencies and personal observations was 15–34 mg C m −2 yr −1.