Thalli of Nephroma arcticum were transplanted between and within a high-elevation alpine heath (1100 m) and a low-elevation subalpine mountain birch forest (380 m) in northern Swedish Lapland and harvested after eight years. Statistically significant differences (P < 0.05) were found between control samples for dark respiration rates, photon use efficiencies (apparent quantum yields) and light compensation points (all were higher in the high-altitude population). The following traits were significantly affected by transplanting: (1) epicortex thickness, (2) upper cortex thickness in the low-altitude population, (3) maximum photosynthetic rates, (4) dark respiration rates and (5) light compensation point. Of these malleable traits, all reduce the differences between the controls although there seems to be over-compensation in maximum net photosynthesis and under-compensation in dark respiration rate of the low-altitude population. Conservative traits, i.e., those that did not change significantly with transplantation were: (1) thallus thickness, (2) algal layer thickness, (3) algal cell diameter and (4) light saturation level. Small, yet significant differences in anatomy and physiology suggest that an ecotypic differentiation was established although the two internal transcribed DNA spacers ITS 1 and ITS 2 showed no corresponding variation between the populations.