Leaf‐level photosynthetic capacity exhibits vertical variations along the canopy profile. The dynamics of photosystem energy partitioning involved in dissipating absorbed light energy, namely photochemical yield (ΦP), fluorescence yield (ΦF), and the efficiency of non‐photochemical quenching yield (ΦN) in dissipating excess light energy as heat, along the vertical canopy profile remain unclear. Here, vertical variations in photosystem energy partitioning and photosynthetic nitrogen allocation were measured at different canopy positions of rice using active fluorescence detection and photosynthetic gas exchange measurement in subtropical southern China. We observed the decline in leaf nitrogen per leaf mass (Nmass) from the top to the bottom of the canopy. ΦP significantly decreased from vegetative growth stage to ripening stage, while ΦN showed an opposite trend. The top and bottom leaves had consistent relationships between photosynthetic nitrogen allocation and photosystem energy partitioning. Our findings reveal the vertical variations in physiological traits of subtropical rice.