The water relations of Cladonia alpestris in spruce-lichen woodland in northern Ontario is described. The rate of drying of the lichen canopy was measured by resistance grids inserted into the canopy and monitored during the drying cycle. The effects of dew were measured in a similar fashion and shown to form an insignificant proportion of the total annual metabolism of the lichen. The lichen mat showed a very high stratified resistance to water loss and the effective mulching properties produce a high level of water availability under the lichen mat. This was confirmed using neutron attenuation techniques and the significance of this discussed in relation to the development of lichen woodland. The physiological response of the lichen to conditions of varying levels of saturation is also discussed.