To assess the effects of stand density and canopy environment on tree physiology, we measured gas exchange responses of the same needle age class of 16-year-old loblolly pines (Pinus taeda L.) in thinned (512 trees ha-1) and non-thinned treatment plots (2,863 trees ha-1) in central Louisiana. Physiological data were collected in the upper and lower canopy positions on 26 sunny days between July 1996 and June 1997 (one-half of the leaf life span). Mean net photosynthesis was highest (4.3 mol m2 s-1) in the spring and closely corresponded with light intensity in the canopy. Photosynthesis in the winter was nearly 3.0 µmol m-2 s-1, indicating that loblolly pine enables substantial carbon fixation all year around in the Gulf Coastal Plain region. Mean transpiration and stomatal conductance were highest in the summer and lowest in the winter. With increased light availability after thinning, needle photosynthesis, transpiration and stomatal conductance rose 84, 40 and 23%, respectively, in the lower canopy of the thinned-treatment trees. Light-saturated photosynthetic capacity of the lower canopy needles was 5.2 µmol m-2 s-1 for the thinned treatment and 4.2 µmol m-2 s-1 for the non-thinned treatment. It is concluded that thinning-induced light penetration through the canopy enhances physiological activities in the lower canopy foliage of residual trees, and that light availability is the only significant variable for predicting needle-level photosynthesis rates.