Photosynthetic responses of rewetted Nostoc flagelliforme to CO2, desiccation, light and temperature were investigated under emersed conditions in order to characterize its ecophysiological behaviour in nature. Net photosynthesis increased to a maximum rate at about 30% water loss, then decreased, while dark respiration always decreased with the progress of desiccation. Light-saturated photosynthesis and dark respiration were significantly reduced at 8 °C, but remained little affected by changes of temperature within the range of 15–35 °C. Photosynthetic efficiency (α) was maximal at the beginning of desiccation and then reduced with increased water loss. Saturating irradiance for photosynthesis was about 194–439 μmol quanta m−2 s−1, being maximal at about 30% water loss. No photoinhibition was observed at irradiances up to 1140 μmol m−2 s−1. Light compensation points were about 41–93 μmol m−2 s−1. Photosynthesis of N. flagelliforme was CO2-limited at the present atmospheric CO2 level. The CO2-saturated photosynthesis increased with increase of irradiance (190–1140 μmol m−2 s−1) and temperature (8–25 °C) and decreased significantly with water loss (0–75%). Photosynthetic affinity for CO2 was sensitive to temperature and irradiance. The CO2 compensation point (Γ) increased significantly with increased temperature and was insensitive to irradiance. Desiccation did not affect Γ values before water loss exceeded 70%. Photorespiratory CO2 release did not occur in N. flagelliforme at the current atmospheric CO2 level.